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Much of the literature on externalities has considered taxes and direct regulation as alternative policy instruments. Both instruments may in practice be imperfect, reflecting informational deficiencies and other limitations. We analyse the use of taxes and regulation in combination, to control...
Persistent link: https://www.econbiz.de/10013156041
The goal of this paper is to bring some unity to the theoretical side of the debate on internalization of airport congestion by showing that all the literature's theoretical results can be derived within one simple and unified framework. The analysis starts by replicating the results of...
Persistent link: https://www.econbiz.de/10012776625
Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these...
Persistent link: https://www.econbiz.de/10013315603
This study develops a theoretical general equilibrium model to examine optimal externality tax policy in the presence of externalities linked to one another through markets rather than technical production relationships. Analytical results reveal that the second-best externality tax rate may be...
Persistent link: https://www.econbiz.de/10013316127
In an integrated dynamic general equilibrium model of the economy and the ecosystem humans and wildlife species compete for land and prey biomass. We introduce a competitive allocation mechanism in both submodels such that economic prices and ecosystem prices guide the allocation in the economy...
Persistent link: https://www.econbiz.de/10013317058
This paper extends the Mirrlees (1971) model of optimal income redistribution with optimal corrective taxes to internalize consumption externalities. It is demonstrated that the optimal second-best tax on an externality-generating good should not be corrected for the marginal cost of public...
Persistent link: https://www.econbiz.de/10013093870
We contrast alternative liability rules for social control of product risks when heterogeneous consumers considering …' mispredictions vary with the prevailing liability regime. We first characterize the consumers' purchasing decision and the … equilibrium levels of safety and activity from the product's usage under no liability, strict liability, and negligence rule. We …
Persistent link: https://www.econbiz.de/10012988969
when the agent is protected by limited liability. In this paper, we investigate how the principal should construct the … globally incentive compatible under limited liability, if local incentive constraints are strictly satisfied. We identify …
Persistent link: https://www.econbiz.de/10012917515
Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when … acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability …
Persistent link: https://www.econbiz.de/10013316254
economic theory to address this issue. We find that the relation between the appropriate compensation and the mean and median …
Persistent link: https://www.econbiz.de/10012950280