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Pollution Regulation and Incentives for Pollution‐Control Research

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  • Gary Biglaiser
  • John K. Horowitz

Abstract

We study the firm's incentives to engage in research for pollution‐control technologies and to adopt new technologies that if discovers or that are discovered by other firms. Licensing of discoveries is assumed possible. We also study the regulator's problem in designing optimal environmental regulations that both control pollution and provide incentives for research. Technology adoption standards are part of the optimal regulation. Another finding is that making the adoption standard stricter reduces research.

Suggested Citation

  • Gary Biglaiser & John K. Horowitz, 1994. "Pollution Regulation and Incentives for Pollution‐Control Research," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(4), pages 663-684, December.
    • Handle: RePEc:bla:jemstr:v:3:y:1994:i:4:p:663-684
    DOI: 10.1111/j.1430-9134.1995.00663.x
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    Cited by:

    1. Dietrich Earnhart & Sarah Jacobson & Yusuke Kuwayama & Richard T. Woodward, 2023. "Discretionary Exemptions from Environmental Regulation: Flexibility for Good or for Ill," Land Economics, University of Wisconsin Press, vol. 99(2), pages 203-221.
    2. Strandholm, John C. & Espinola-Arredondo, Ana & Munoz-Garcia, Felix, 2021. "Pollution abatement with disruptive R&D investment," Resource and Energy Economics, Elsevier, vol. 66(C).

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