We examine an incentive scheme for a group of agents, where all agents are rewarded ifthe group meets its target. If the group does not meet its target, only the agents that meettheir individual target are rewarded. In environmental policy, the EU burden sharingagreement and the UK Climate...

This paper compares emissions trading based on a cap on total emissions (permit trading)and on relative standards per unit of output (credit trading). Two types of market structureare considered: perfect competition and Cournot oligopoly. The effect of combining the twoschemes is also...

We examine whether an economy can have a bad (small or no formal sector, hightaxes) as well as a good (small or no informal sector, low taxes) equilibrium...

In an investment contest for environmental policy, polluters and victims ofpollution invest in an increase of their marginal benefits of pollution and environmentalquality, respectively. These investments influence time-consistent environmental policy...

We analyze the design of optimal environmental policy when environmentaldamage is uncertain and investments in abatement technologies are irreversible. Weassume that the investment in the new abatement technology can be used for twoperiods and that the true extent of environmental damage will...