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Stimulating Mechanisms in Ecologically Motivated Regulation: Will Ecological Policies in Transition and Developing Countries Become Efficient?

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  • Matveenko, V.

    (Institute for Economics and Mathematics of Russian Academy of Sciences, St. Petersburg, Russia)

Abstract

In this paper, the theory of stimulating mechanisms is used to study the relationship between characteristics of polluting firms and results of ecological policy. It is shown that the optimal ecologically motivated policy can qualitatively change in accordance with a relative effectiveness of types of firms. Two models are proposed. In the first of them the regulator has no information on a type of firm but possesses information about cost functions of the types of firms. In the second (game) model, moreover, the regulator has no information about levels of investment chosen by the types of firms.

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File URL: http://www.econorus.org/repec/journl/2010-8-10-34r.pdf
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Bibliographic Info

Article provided by New Economic Association in its journal Journal of the New Economic Association.

Volume (Year): (2010)
Issue (Month): 8 ()
Pages: 10-34

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Handle: RePEc:nea:journl:y:2010:i:8:p:10-34

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Related research

Keywords: ecological policy; regulation; stimulating mechanism; contract; relative economic effectiveness; Nash equilibrium; developing and transition economies;

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References

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  1. Kwerel, Evan, 1977. "To Tell the Truth: Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 595-601, October.
  2. Cowen, Tyler & Glazer, Amihai & Zajc, Katarina, 2000. "Credibility may require discretion, not rules," Journal of Public Economics, Elsevier, vol. 76(2), pages 295-306, May.
  3. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
  4. Spulber, Daniel F., 1988. "Optimal environmental regulation under asymmetric information," Journal of Public Economics, Elsevier, vol. 35(2), pages 163-181, March.
  5. Baliga, Sandeep & Maskin, Eric, 2003. "Mechanism design for the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 7, pages 305-324 Elsevier.
  6. Dasgupta, Partha & Hammond, Peter & Maskin, Eric, 1980. "On Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Wiley Blackwell, vol. 47(5), pages 857-60, October.
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Cited by:
  1. Bagrat Yerznkyan, 2012. "Pluralistic Institutional Solutions Of The Problem Of Externalities," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 8(2), pages 73-86.

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