Evidence suggests that a large majority of firms and individuals comply with regulations and tax laws even though the frequency of inspections and audits is often low. Moreover, fines for noncompliance are also typically low when regulatory violations are discovered. These observations are not...

Unexpected variation in emissions can have a substantial impact on the prices and efficiency of tradable emission permit markets. In this paper we report results from a laboratory experiment in which subjects participate in an emissions trading market in the presence of emissions uncertainty....

Land use changes to reduce non-point source pollution, such as nutrient runoff to waterways from agricultural production, incur opportunity costs that are privately known to landholders. Auctions may permit the regulator to identify those management changes that have greater environmental...