Participation in and Compliance with Public Voluntary Environmental Programs: An Evolutionary Approach
AbstractThe joint evolution of participating and complying firms in a public VA, along with the evolution of the pollution stock is examined. Replicator dynamics modeling participation and compliance are combined with pollution stock dynamics. Fast-slow selection dynamics are used to capture the fact that decisions to participate in and further comply with the public VA evolve in different time scales. Evolutionary stable (ES) equilibria depend on the structure of the legislation and auditing probability. Partial participation and partial compliance can be ES equilibria, with possible multiplicities, in addition to the monomorphic equilibria of full (non) compliance. Convergence to these equilibria could be monotonic or oscillating. Full participation and compliance can be attained if the regulator is pre-committed to certain legislation and inspection probabilities, or by appropriate choices of the legislatively set emission level and the non-compliance fine.
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Bibliographic InfoPaper provided by University of Crete, Department of Economics in its series Working Papers with number 0403.
Length: 26 pages
Date of creation: 29 Feb 2004
Date of revision:
Voluntary agreements; participation; compliance; evolutionary stability; replicator dynamics.;
Other versions of this item:
- Constadina Passa & Anastasios Xepapadeas, 2004. "Participation in and Compliance with Public Voluntary Environmental Programs: An Evolutionary Approach," Working Papers 2004.67, Fondazione Eni Enrico Mattei.
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
- L5 - Industrial Organization - - Regulation and Industrial Policy
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