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

Hamet Sarr, Mohamed Bchir, Francois Cochard () and Anne Rozan
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Hamet Sarr: UMR GESTE - Gestion Territoriale de l'Eau et de l'environnement - ENGEES - École Nationale du Génie de l'Eau et de l'Environnement de Strasbourg - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture
Mohamed Bchir: UMR GESTE - Gestion Territoriale de l'Eau et de l'environnement - ENGEES - École Nationale du Génie de l'Eau et de l'Environnement de Strasbourg - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture
Francois Cochard: CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]
Anne Rozan: UMR GESTE - Gestion Territoriale de l'Eau et de l'environnement - ENGEES - École Nationale du Génie de l'Eau et de l'Environnement de Strasbourg - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture

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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)
Date: 2016-05-01
New Economics Papers: this item is included in nep-cdm, nep-env, nep-exp, nep-pbe and nep-pub
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