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| Smith, Rodney B.W.; Tomasi, Theodore D.. |
| Mechanism design theory is used to develop the properties of optimal pollution control incentive schemes in the presence of adverse selection, moral hazard, and transaction costs. The model presented here shows (a) with no deadweight costs (transaction costs) , first-best allocations are always possible; (b) in the presence of transaction costs (caused by raising taxes), only second-best allocations are feasible; and (c) the conditions under which the optimal incentive scheme implementing second-best allocations will be a nonlinear tax, a standard(s), or a combination of both taxes and standard(s). |
| Tipo: Journal Article |
Palavras-chave: Environmental Economics and Policy. |
| Ano: 1995 |
URL: http://purl.umn.edu/30768 |
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| Smith, Rodney B.W.; Tomasi, Theodore D.. |
| Assuming asymmetric information over farmer profits and zero transaction costs, prior literature has suggested that when regulating nonpoint source water pollution, a tax on management practices (inputs) can implement full-information allocations and is superior to a tax on estimated runoff. Using mechanism design theory under asymmetric information, this paper show that under the same assumptions, management practice taxes and taxes on estimated runoff are equally efficient. |
| Tipo: Journal Article |
Palavras-chave: Environmental Economics and Policy. |
| Ano: 1999 |
URL: http://purl.umn.edu/31489 |
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