Macho-Stadler, Inés; Pérez-Castrillo, J. David - In: SERIEs : Journal of the Spanish Economic Association 1 (2010) 3, pp. 277-304
We consider a model of polluting firms subject to tax on emissions, monitoring, and penalties in case of underreporting and which face a choice between a more expensive clean and a less expensive dirty technology. Moreover, emissions are subject to random events.We show that the optimal...
