OPTIMAL ENVIRONMENTAL REGULATION UNDER ASYMMETRIC INFORMATION
2019
Spulber, Daniel
A model of environmental regulation with interdependent production and pollution abatement costs and heterogeneous firms is developed. Firms have private information about costs which have a quadratic form. A budget-balancing problem is shown to—exist --- even with Bayes-Nash strategies. The full information optimum cannot be attained unless gains from trade in the product market net of external damages exceed the information rents earned by firms.
Show more [+] Less [-]Bibliographic information
This bibliographic record has been provided by University of Minnesota