Pollution claim settlements reconsidered : Hidden information and bounded payments

Goldlücke, Susanne; Schmitz, Patrick W.

Pollution claim settlements reconsidered : Hidden information and bounded payments

Dateien

Goldluecke_2-11f617ep2qekk4.pdfGröße: 623.97 KBDownloads: 1232

Datum

2018

Autor:innen

Goldlücke, Susanne

Schmitz, Patrick W.

Open Access-Veröffentlichung

Open Access Hybrid

Sammlungen

Wirtschaftswissenschaften

Publikationstyp

Zeitschriftenartikel

Publikationsstatus

Published

Erschienen in

European Economic Review. 2018, 110, pp. 211-222. ISSN 0014-2921. eISSN 1873-572X. Available under: doi: 10.1016/j.euroecorev.2018.08.005

Zusammenfassung

A principal’s production decision imposes a negative externality on an agent. The principal may be a pollution-generating firm, the agent may be a nearby town. The principal offers a contract to the agent, who has the right to be free of pollution. Then the agent privately learns the disutility of pollution. Finally, a production level and a transfer payment are implemented. Suppose there is an upper bound (possibly zero) on payments that the agent can make to the principal. In the second-best solution, there is underproduction for low cost types, while there is overproduction for high cost types. In contrast to standard adverse selection models of pollution claim settlements, there may thus be too much pollution compared to the first-best solution.

Fachgebiet (DDC)

330 Wirtschaft

Schlagwörter

Coasian contracting, Negative externalities, Hidden information, Limited liability, Overproduction

Zitieren

ISO 690

GOLDLÜCKE, Susanne, Patrick W. SCHMITZ, 2018. Pollution claim settlements reconsidered : Hidden information and bounded payments. In: European Economic Review. 2018, 110, pp. 211-222. ISSN 0014-2921. eISSN 1873-572X. Available under: doi: 10.1016/j.euroecorev.2018.08.005

BibTex

@article{Goldlucke2018-11Pollu-44175,
  year={2018},
  doi={10.1016/j.euroecorev.2018.08.005},
  title={Pollution claim settlements reconsidered : Hidden information and bounded payments},
  volume={110},
  issn={0014-2921},
  journal={European Economic Review},
  pages={211--222},
  author={Goldlücke, Susanne and Schmitz, Patrick W.}
}

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