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Optimal Environmental Radical Activism

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  • Mireille Chiroleu-Assouline

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Ariane Lambert-Mogiliansky

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We study the problem faced by activists who want to maximize …rms'compliance with high environmental standards. Our focus is on radical activism which relies on non-violent civil disobedience. Disruptive actions and the threat thereof are used to force …rms to concede i.e., to engage in self-regulation. We address the optimal use of scarce activist resources in face of incomplete information by looking at a general mechanism, directly adapted from Myerson's (1981) optimal auction theory. The characterization informs that the least vulnerable and most polluting …rms should be targeted with disruptive actions while the others are granted a guarantee not to be targeted in exchange for a concession. This characterization allows studying the determinants of the activist's strength and how it is a¤ected by repression, a central feature for civil disobedience. We …nd that optimal radical activism is relatively resilient to repression. In an extension that accounts for asymmetry between …rms'abatement cost, we …nd that the mechanism optimizes the allocation of abatment efforts and creates incentives for innovation. We discuss some other welfare properties of optimal activism.

Suggested Citation

  • Mireille Chiroleu-Assouline & Ariane Lambert-Mogiliansky, 2020. "Optimal Environmental Radical Activism," PSE Working Papers halshs-02492834, HAL.
    • Handle: RePEc:hal:psewpa:halshs-02492834
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02492834
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    References listed on IDEAS

    as
    1. David P. Baron, 2016. "Self‐Regulation and the Market for Activism," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(3), pages 584-607, September.
    2. Gupta, Sonam & Innes, Robert, 2014. "Private politics and environmental management," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 319-339.
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    6. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Activism; self-regulation; mechanism design; repression Keywords: Activism; repression;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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