Perfect Foresight vs. Time-Stepped Approach

Ok, I may be starting to understand the question.

If your investment tax in period t+1 is a linear function of the NCAP values in period t, you can use a dynamic user constraint between t and t+1, bounding a flow in period t+1 according to the NCAP in period t, and set a tax on that flow.  Then you can indeed use time-stepped solution with single period steps and a zero overlap to make the model myopic to these delayed taxes. However, be aware that the model is extremely myopic when using non-overlapping time-steps like this.

Moreover, as the model is myopic to the taxes, the taxes have no impact on the investment decisions. Therefore, you could equally well leave them out of the model and calculate them exogenously, as the solution would be the same both ways. But maybe I am still misunderstanding the question?


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Perfect Foresight vs. Time-Stepped Approach - by Antti-L - 06-07-2015, 11:36 AM

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