Optimal Environmental Standards under Asymmetric Information and Imperfect Enforcement

C. Arguedas

Research output: Working paperDiscussion paperOther research output

231 Downloads (Pure)

Abstract

We study optimal policies composed of pollution standards, probabilities of inspection and fines dependant on the degree of noncompliance with the standards, in a context where regulated firms own private information.In contrast with previous literature, we show that optimal policies, being either pooling or separating, can imply violations to strictly positive standards.This results crucially depends on the monitoring costs, the types of firms and the regulator's degree of uncertainty.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages38
Volume2005-10
Publication statusPublished - 2005

Publication series

NameCentER Discussion Paper
Volume2005-10

Keywords

  • standard-setting
  • costly inspections
  • convex fines
  • asymmetric information
  • noncompliance

Fingerprint Dive into the research topics of 'Optimal Environmental Standards under Asymmetric Information and Imperfect Enforcement'. Together they form a unique fingerprint.

Cite this