Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax

Hamet Sarr (), Mohamed Ali Bchir (), François Cochard () and Anne Rozan ()
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Hamet Sarr: ENGEES, UMR GESTE, université Strasbourg
Mohamed Ali Bchir: ENGEES, UMR GESTE, université Strasbourg
François Cochard: CRESE EA3190 Univ. Bourgogne Franche-Comté
Anne Rozan: ENGEES, UMR GESTE, université Strasbourg

No 2016-05, Working Papers from CRESE

Abstract: The Average Pigouvian Tax (APT) was proposed by Suter et al. (2008) to reduce the financial burden of the standard ambient tax. This instrument consists in a standard ambient tax divided by the number of firms, which requires polluters to cooperate in order to achieve the social optimum. To enable polluters to cooperate, communication is allowed. We introduce different types of communication: cheap talk, exogenous costly communication (communication is imposed), and endogenous costly communication (conducted on a voluntary basis after a vote). Our experiment confirms that the instrument induces polluters to reduce their emissions under cheap talk. However, we find that group emissions are less reduced when communication is costly. This result still holds even when we endogenize communication by introducing a voting phase.

Keywords: nonpoint source pollution; ambient tax; social dilemma; cooperation; cheap talk; costly communication; vote. (search for similar items in EconPapers)
JEL-codes: C92 H23 Q53 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2016-05
New Economics Papers: this item is included in nep-cdm, nep-env and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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