Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154849
Authors: 
Rausser, Gordon Clyde
Simon, Leo K.
Zhao, Jinhua
Year of Publication: 
1997
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 87.1997
Abstract: 
Superfund cleanup has been extremely slow. Traditional analysis has centred around reducing the heavy negotiation and litigation to expedite the cleanup process. This paper investigates other factors which provide possible incentives for the PRPs to delay the cleanup, namely discounting, risk aversion, and compensation for off-site damage. Liability share is found to play an essential role in PRP's incentives to delay. Commonly adopted EPA strategies, such as negotiating with PRP steering committees and buying out de minimis PRPs, may provide incentives to delay the cleanup. The paper also designs a Bayesian mechanism for information extraction, and finds that the lump sum transfer mechanism is not always efficient.
Subjects: 
Environmental economics
Superfund
CERCLA
Potentially responsible parties (PRPs)
Strategic information transmission
Strategic delay
Environmental remediation
Cleanup
JEL: 
D82
Q28
Document Type: 
Working Paper

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