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Environmental taxes and strategic delegation

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  • Juan Carlos Bárcena-Ruiz

    (Departamento de Fundamentos del Análisis Económico I, Universidad del País Vasco, Avenida Lehendakari Aguirre, 83, 48015 Bilbao, Spain)

  • María Begoña Garzón

    (Departamento de Fundamentos del Análisis Económico I, Universidad del País Vasco, Avenida Lehendakari Aguirre, 83, 48015 Bilbao, Spain)

Abstract

This paper analyzes a managerial delegation model in which the government chooses an environmental tax to control environmental damage. By giving the managers of firms an incentive scheme based on a linear combination of profit and sales revenue, we show that firm owners have to pay a higher environmental tax and both environmental damage and social welfare increase compared to the profit-maximization case.

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Bibliographic Info

Article provided by Springer in its journal Spanish Economic Review.

Volume (Year): 4 (2002)
Issue (Month): 4 ()
Pages: 301-309

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Handle: RePEc:spr:specre:v:4:y:2002:i:4:p:301-309

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Related research

Keywords: Environmental taxes; managerial incentives; strategic delegation;

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Cited by:
  1. Rupayan Pal & Bibhas Saha, 2010. "Does Partial Privatization Improve the Environment?," Working Papers id:3122, eSocialSciences.
  2. Trishita Bhattacharjee & Rupayan Pal, 2013. "Price vs. Quantity in duopoly with strategic delegation: Role of network externalities," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2013-010, Indira Gandhi Institute of Development Research, Mumbai, India.
  3. Manel Antelo, 2005. "Double informational asymmetry, signaling, and environmental taxes," Economic Working Papers at Centro de Estudios Andaluces E2005/25, Centro de Estudios Andaluces.
  4. Rupayan Pal, 2009. "Delegation and Emission Tax in a Differentiated Oligopoly," Working Papers id:2263, eSocialSciences.
  5. Rupayan Pal, 2009. "Delegation and emission tax in a differentiated oligopoly," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2009-007, Indira Gandhi Institute of Development Research, Mumbai, India.
  6. Rupayan Pal & Bibhas Saha, 2011. "Mixed duopoly and environment," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2011-005, Indira Gandhi Institute of Development Research, Mumbai, India.
  7. Rupayan Pal & Bibhas Saha, 2010. "Does partial privatization improve the environment," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-018, Indira Gandhi Institute of Development Research, Mumbai, India.
  8. Rupayan Pal & Bibhas Saha, 2011. "Environmental outcomes in a model of mixed duopoly," University of East Anglia Applied and Financial Economics Working Paper Series 030, School of Economics, University of East Anglia, Norwich, UK..
  9. Wang, Leonard F.S. & Wang, Jean, 2009. "Environmental taxes in a differentiated mixed duopoly," Economic Systems, Elsevier, vol. 33(4), pages 389-396, December.
  10. Trishita Bhattacharjee & Rupayan Pal, 2013. "Managerial delegation in monopoly under network effects," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2013-009, Indira Gandhi Institute of Development Research, Mumbai, India.

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