Recent analysis on the cost-effectiveness of inducing perfect compliance in cap and trade programs is based on the possibility that a regulator has of inducing each individual firm to emit the same level of pollution by altering the supply of permits and the monitoring probability according to...

We study individual compliance behavior with respect to a legal norm in an experimental setting under two different regulatory instruments: emission standards and tradable pollution permits. Compliance to the same set of standards and expected permit holdings was induced with different...