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On the Social Value of Disclosed Information and Environmental Regulation

Author

Listed:
  • Jihad C. Elnaboulsi

    () (CRESE, Univ. Bourgogne Franche-Comté)

  • W. Daher

    () (Gulf University for Science and Technology, Department of Mathematics and Natural Science)

  • Yigit Saglam

    () (Victoria University of Wellington, School of Economics and Finance)

Abstract

This paper presents an analysis of environmental policy in imperfectly competitive market with private information. We examine how environmental taxes should be optimally levied when the regulator faces asymmetric information about production and abatement costs in an irreversible observable policy commitment game. Under our setting, the paper investigates how information disclosure can improve the efficiency of the tax setting process and may offer an eficient complement to conventional regulatory approaches. From a policy perspective, our ?ndings suggest that access to publicly disclosed information improves the ability of the regulator to levy ?rms? speci?c environmental taxes. Despite its advantages, however, informational disclosure may harm the environmental policy it purports to enhance since it facilitates collusive behavior. We show that information sharing may occur and thus leads to a superior outcome in terms of industry output and emissions. Disclosure may undermine market performance and environmental policy.

Suggested Citation

  • Jihad C. Elnaboulsi & W. Daher & Yigit Saglam, 2015. "On the Social Value of Disclosed Information and Environmental Regulation," Working Papers 2015-14, CRESE.
  • Handle: RePEc:crb:wpaper:2015-14
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Environmental Regulation; Emissions Taxes; Collusion; Disclosed Information; Private Information; Information Sharing.;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • 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

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