Is Regulation by Milestones Efficiency Enhancing? - An Experimental Study of Environmental Protection -

Andreas Freytag (), Werner Güth (), Hannes Koppel and Leo Wangler ()
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Leo Wangler: School of Economics and Business Administration, Friedrich-Schiller-University Jena

No 2010-086, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Viewing individual contributions as investments in emission reduction we rely on the familiar linear public goods- game to set global reduction targets which, if missed, imply that all payoffs are destroyed with a certain probability. Regulation by milestones does not only impose a final reduction target but also intermediate ones. In our leading example the regulating agency is Mother Nature but our analysis can, of course, be applied to other regulating agencies as well. We are mainly testing for milestone effects by varying the size of milestones in addition to changing the marginal productivity of individual contributions and the probability to lose.

Keywords: Cumulative Public Goods; Milestones; Climate Change; Experiment. (search for similar items in EconPapers)
JEL-codes: C92 D78 H41 Q54 (search for similar items in EconPapers)
Date: 2010-12-02
New Economics Papers: this item is included in nep-cbe, nep-ene, nep-env, nep-exp and nep-reg
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Is regulation by milestones efficiency enhancing? An experimental study of environmental protection (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2010-086

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