Environmental taxes and strategic delegation

Juan Bárcena-Ruiz and María Garzon ()

Spanish Economic Review, 2002, vol. 4, issue 4, 301-309

Abstract: This paper analyzes a managerial delegation model in which the government chooses an environmental tax to control environmental damage. By giving the managers of firms an incentive scheme based on a linear combination of profit and sales revenue, we show that firm owners have to pay a higher environmental tax and both environmental damage and social welfare increase compared to the profit-maximization case.

Keywords: Environmental taxes; managerial incentives; strategic delegation (search for similar items in EconPapers)
JEL-codes: L13 Q28 (search for similar items in EconPapers)
Date: 2002-11-29
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Citations: View citations in EconPapers (20)

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