Honesty in Environmental Regulation

Roberto Rodriguez-Ibeas

Journal of Regulatory Economics, 2003, vol. 24, issue 1, 35-48

Abstract: This paper analyzes the determination of the optimal environmental regulatory policy under imperfect competition when the firms differ in their polluting technologies and degree of honesty. We show that more honesty does not necessarily imply lower social losses. The effect of honesty in social welfare depends not only on the degree of honesty measured by the proportion of honest firms and their particular cost features but also on the industry structure. Copyright 2003 by Kluwer Academic Publishers

Date: 2003
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