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Optimal Environmental Radical Activism

Mireille Chiroleu-Assouline () and Ariane Lambert-Mogiliansky ()

No 2020.07, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: We study the problem faced by activists who want to maximize firms' compliance with high environmental standards. Our focus is on radical activism which relies on non-violent civil disobedience. Disruptive actions and the threat thereof are used to force firms to concede i.e., to engage in self-regulation. We address the optimal use of scarce activist resources in face of incomplete information by looking at a general mechanism, directly adapted from Myerson's (1981) optimal auction theory. The characterization informs that the least vulnerable and most polluting firms should be targeted with disruptive actions while the others are granted a guarantee not to be targeted in exchange for a concession. This characterization allows studying the determinants of the activist's strength and how it is affected by repression, a central feature for civil disobedience. We find that optimal radical activism is relatively resilient to repression. In an extension that accounts for asymmetry between firms' abatement cost, we find that the mechanism optimizes the allocation of abatment efforts and creates incentives for innovation. We discuss some other welfare properties of optimal activism.

Keywords: Activism; Self-regulation; Mechanism design; Repression (search for similar items in EconPapers)
JEL-codes: D44 D73 D82 F21 G22 H23 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2020-02
New Economics Papers: this item is included in nep-env and nep-reg
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http://faere.fr/pub/WorkingPapers/Chiroleu-Assouli ... _FAERE_WP2020.07.pdf First version, 2020 (application/pdf)

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