Environmental taxes and strategic delegation
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.
Volume (Year): 4 (2002)
Issue (Month): 4 ()
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