Environmental enforcement with endogenous ambient monitoring
Laurent Franckx ()
Energy, Transport and Environment Working Papers Series from KU Leuven, Department of Economics - Research Group Energy, Transport and Environment
This paper extends a previous analysis by Franckx (2001). We consider an inspection game between n polluting firms and an environmental enforcement agency. If the cost of monitoring ambient pollution is low enough, the optimal inspection policy consists in, on the one hand, imposing the maximal possible fine, and, on the other hand, mixing between observing ambient pollution and not conducting any inspection at all. However, with stringent upper limits on the fine, the agency mixes between observing ambient pollution and inspecting all firms. The observation of ambient pollution is always followed by sequentially rational firm inspections.
Keywords: environmental enforcement; ambient inspections; commitment (search for similar items in EconPapers)
JEL-codes: K42 Q20 (search for similar items in EconPapers)
Pages: 29 pages
New Economics Papers: this item is included in nep-ene, nep-ent, nep-net and nep-res
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Journal Article: Environmental Enforcement with Endogenous Ambient Monitoring (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:etewps:ete0115
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