A theory of environmental risk disclosure
AbstractThe regulation of environmental risks increasingly emphasizes the awareness and empowerment of stakeholders. The success of this approach, however, seems to depend crucially on the quality of environmental disclosures. In this paper we investigate the amount and quality of the information that would be voluntarily delivered to some stakeholder by a potential polluter. We find that information may be hazier when the stakeholder is confident (or naive) a priori, the cost of analyzing the received reports increases little with their complexity, or a polluter's net expected payoff from undertaking an industrial activity that would turn out to be unsafe is small. A worried stakeholder and a low cost of producing more accurate figures, on the other hand, may favor disclosure of high-quality information. By delivering information of very good quality, safe firms can set themselves apart more easily from the dangerous ones the higher the relative ex post payoff from their current industrial activity. The implications of this framework for the scope and design of public programs of environmental disclosure are briefly examined. La rÃ©glementation des risques environnementaux met de plus en plus l'accent sur l'information et la responsabilisation des parties prenantes. Le succÃ¨s de cette approche repose toutefois largement sur la qualitÃ© de l'information fournie par les entreprises visÃ©es. Cet article porte sur la quantitÃ© et la qualitÃ© de l'information qui serait volontairement fournie Ã une partie prenante par un pollueur potentiel. On trouve que cette information sera moins prÃ©cise lorsque la partie prenante est confiante (voire naÃ¯ve) a priori, que le coÃ»t d'analyse de l'information livrÃ©e croÃ®t avec la complexitÃ© de celle-ci, ou que le revenu attendu par une entreprise se rÃ©vÃ©lant Ãªtre en non conformitÃ© est petit. En revanche, une partie prenante inquiÃ¨te et un faible coÃ»t de production de donnÃ©es prÃ©cises encouragent la livraison d'une information de
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 45 (2003)
Issue (Month): 2, Supplement 1 (March)
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Web page: http://www.elsevier.com/locate/inca/622870
Other versions of this item:
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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