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Asymmetrical information and delay of a side payment in unidirectional transboundary pollution

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  • Norimichi Matsueda

    (Kwansei Gakuin University)

Abstract

It has been argued that unidirectional transboundary pollution can likely be resolved efficiently with the provision of a side payment from a victim especially when the pollution originates from a developing country and is transported to a developed country. However, its offer of a side payment might be delayed intentionally in the presence of asymmetrical information about the damage cost of a polluter because a certain type of polluter might attempt to disguise itself and increase its total payoff. Postponement of a side payment could protect a victim from incurring a potentially greater loss due to this polluter’s deceptive behavior. The realization of such strategic delay may partly explain the infrequency of international side payments.

Suggested Citation

  • Norimichi Matsueda, 2002. "Asymmetrical information and delay of a side payment in unidirectional transboundary pollution," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(3), pages 229-247, September.
    • Handle: RePEc:spr:envpol:v:5:y:2002:i:3:d:10.1007_bf03353923
    DOI: 10.1007/BF03353923
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