Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142294
Authors: 
Pench, Alberto
Year of Publication: 
2016
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 20.2016
Abstract: 
The paper addresses the problem of information asymmetry between a regulator and the polluting firms and proposes a very simple mechanism where the regulator is free to choose, without communicating in advance to the firms, between two instruments: an effluent fee or a standard: as a result in a real world setting this uncertainty might induce firms to a truthful revelation. Moreover, under the assumption of linear marginal abatement or marginal social damage functions, in many cases the resulting optimal behaviour might be an under reporting for some firms and an over reporting for others so that the resulting marginal aggregate benefit function might be not so far from the true one and the aggregate pollution level attained by the mechanism not so far from optimal.
Subjects: 
Effluent Fee
Standards
Asymmetric Information
Truthful Revelation
JEL: 
H23
Q5
Document Type: 
Working Paper

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