An Investigation of Voluntary Discovery and Disclosure of Environmental Violations Using Laboratory Experiments
AbstractThis paper uses laboratory experiments to test individual responses to policies that seek to encourage firms to voluntarily discover and disclose violations of environmental standards. We find that while it is possible to motivate a significant number of voluntary disclosures without adversely affecting environmental quality, this result is sensitive to both the fine for disclosed violations and the assumption that firms know their compliance status without cost. When firms have to expend resources to determine their compliance status, motivating a significant number of violation disclosures yields worse environmental quality. Finally, relative to conventional enforcement, disclosure polices will result in more violations being sanctioned, but fewer of these sanctions are for violations that are uncovered by the government.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Massachusetts Amherst, Department of Resource Economics in its series Working Papers with number 2005-7.
Length: 26 pages
Date of creation: Sep 2005
Date of revision:
enforcement; compliance; environmental standards; self-reporting; self-auditing voluntary disclosure;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-11-18 (Agricultural Economics)
- NEP-ALL-2006-11-18 (All new papers)
- NEP-ENV-2006-11-18 (Environmental Economics)
- NEP-EXP-2006-11-18 (Experimental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Isaac, R Mark & James, Duncan, 2000. " Just Who Are You Calling Risk Averse?," Journal of Risk and Uncertainty, Springer, vol. 20(2), pages 177-87, March.
- Kaplow, Louis & Shavell, Steven, 1994.
"Optimal Law Enforcement with Self-Reporting of Behavior,"
Journal of Political Economy,
University of Chicago Press, vol. 102(3), pages 583-606, June.
- Louis Kaplow & Steven Shavell, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," NBER Working Papers 3822, National Bureau of Economic Research, Inc.
- Innes, Robert, 1999. "Remediation and self-reporting in optimal law enforcement," Journal of Public Economics, Elsevier, vol. 72(3), pages 379-393, June.
- Pfaff, Alexander S P & Sanchirico, Chris William, 2000. "Environmental Self-Auditing: Setting the Proper Incentives for Discovery and Correction of Environmental Harm," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 189-208, April.
- Innes, Robert, 2001. "Violator Avoidance Activities and Self-Reporting in Optimal Law Enforcement," Journal of Law, Economics and Organization, Oxford University Press, vol. 17(1), pages 239-56, April.
- Alexander & Chris William Sanchirico & John Lee & Daniel Prager, 2002.
"Big field, small potatoes: An empirical assessment of EPA's self-audit policy,"
0102-55, Columbia University, Department of Economics.
- Alexander Pfaff & Chris William Sanchirico, 2004. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 415-432.
- Malik Arun S., 1993. "Self-Reporting and the Design of Policies for Regulating Stochastic Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 241-257, May.
- Mishra, Birendra K. & Paul Newman, D. & Stinson, Christopher H., 1997. "Environmental regulations and incentives for compliance audits," Journal of Accounting and Public Policy, Elsevier, vol. 16(2), pages 187-214.
- Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
- Lana Friesen, 2012.
"Certainty of Punishment versus Severity of Punishment: An Experimental Investigation,"
Southern Economic Journal,
Southern Economic Association, vol. 79(2), pages 399-421, October.
- Lana Friesen, 2009. "Certainty of Punishment versus Severity of Punishment- An Experimental Investigation," Discussion Papers Series 400, School of Economics, University of Queensland, Australia.
- Kjetil Telle, 2012. "Monitoring and enforcement of environmental regulations. Lessons from a natural field experiment in Norway," Discussion Papers 680, Research Department of Statistics Norway.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eileen Keegan).
If references are entirely missing, you can add them using this form.