We add social norms into Laffont’s mechanism designed for environmental risk. We find with endogenous social norms and asymmetric information about personal norms, the optimal contract induces more (less) effort from the “green” (“brown”) firm.

Spontaneous combustion of coal is a natural hazard during mining. In China, more than 60 % of cases of spontaneous combustion of coal in China result from coal pillars in goafs. In this paper, the plastic deformation of a coal pillar was simulated and, based on the simulated vertical and...