Unilateral delegation and reimbursement systems in an environmental conflict

Byung In Lim and Jason Shogren

Applied Economics Letters, 2004, vol. 11, issue 8, 489-493

Abstract: How unilateral delegation by a citizens' group with lower ability than a firm affects individual and total effort and the contest favourite under the two reimbursement systems are examined. A citizens' group that unilaterally hires a delegate to represent them causes the firm to increase its effort level so that it always exceeds the group's delegate - irrespective of the relative strength of the two parties. In contrast to earlier work without either delegation or reimbursement, a citizens' group that hires a delegate could now be the contest favourite; although it is more likely to occur under the asymmetric reimbursement rule.

Date: 2004
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DOI: 10.1080/1350485042000207252

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