Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74147
Authors: 
Dijkstra, Bouwe R.
Rübbelke, Dirk T.G.
Year of Publication: 
2007
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 44.2007
Abstract: 
We examine an incentive scheme for a group of agents, where all agents are rewarded if the group meets its target. If the group does not meet its target, only the agents that meet their individual target are rewarded. In environmental policy, the EU burden sharing agreement and the UK Climate Change Agreements feature this incentive scheme. There is only a difference in outcome between group and individual rewards if emissions are stochastic. Group rewards generally lead to higher expected emissions than individual rewards. The attraction of the group reward scheme may lie in its fairness and its tough-looking targets.
Subjects: 
Team Incentive Scheme
Stochastic Pollution
UK Climate Change Agreements
JEL: 
Q54
Q58
Document Type: 
Working Paper

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