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Participation in and Compliance with Public Voluntary Environmental Programs: An Evolutionary Approach

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  • Anastasios Xepapadeas

    (Department of Economics, University of Crete, Greece)

  • Constadina Passa

    (Department of Economics, University of Crete, Greece)

Abstract

The 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.

Suggested Citation

  • Anastasios Xepapadeas & Constadina Passa, 2004. "Participation in and Compliance with Public Voluntary Environmental Programs: An Evolutionary Approach," Working Papers 0403, University of Crete, Department of Economics.
    • Handle: RePEc:crt:wpaper:0403
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    References listed on IDEAS

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    Cited by:

    1. Michèle Breton & Lucia Sbragia & Georges Zaccour, 2010. "A Dynamic Model for International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 25-48, January.
    2. Rinaldo Brau & Carlo Carraro, 2011. "The design of voluntary agreements in oligopolistic markets," Journal of Regulatory Economics, Springer, vol. 39(2), pages 111-142, April.

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    More about this item

    Keywords

    Voluntary agreements; participation; compliance; evolutionary stability; replicator dynamics.;
    All these keywords.

    JEL classification:

    • 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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