Regulating Global Externalities

Research output: Working paperDiscussion paperOther research output

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Abstract

The question in which we are interested is how a market inhabited by multiple
agents, about whom we are differentially uncertain, and who trade goods the use of
which imposes a negative effect on others, is to be ideally regulated. We show that a
priori asymmetric uncertainty, when combined with a posteriori observed outcomes,
is a rich source of information that can be used to reduce aggregate uncertainty. The observation implies that whereas asymmetric information usually entails a cost on welfare, it can help achieve greater efficiency in regulation.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages22
Volume2019-001
Publication statusPublished - 10 Jan 2019

Publication series

NameCentER Discussion Paper
Volume2019-001

Fingerprint

Sources of information
Asymmetric information
Uncertainty
Aggregate uncertainty
Externalities
Costs

Keywords

  • asymmetric information
  • regulatory instruments
  • policy updating
  • asymmetric uncerntainty
  • decison making under uncertainty

Cite this

Heijmans, R. J. R. K., & Gerlagh, R. (2019). Regulating Global Externalities. (CentER Discussion Paper; Vol. 2019-001). Tilburg: CentER, Center for Economic Research.
Heijmans, Roweno J.R.K. ; Gerlagh, Reyer. / Regulating Global Externalities. Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper).
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Heijmans, RJRK & Gerlagh, R 2019 'Regulating Global Externalities' CentER Discussion Paper, vol. 2019-001, CentER, Center for Economic Research, Tilburg.

Regulating Global Externalities. / Heijmans, Roweno J.R.K.; Gerlagh, Reyer.

Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper; Vol. 2019-001).

Research output: Working paperDiscussion paperOther research output

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KW - policy updating

KW - asymmetric uncerntainty

KW - decison making under uncertainty

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T3 - CentER Discussion Paper

BT - Regulating Global Externalities

PB - CentER, Center for Economic Research

CY - Tilburg

ER -

Heijmans RJRK, Gerlagh R. Regulating Global Externalities. Tilburg: CentER, Center for Economic Research. 2019 Jan 10. (CentER Discussion Paper).