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, we show that the stick-and-carrot punishment à la Abreu (1986) may not be globally optimal. We prove our result by …-and-carrot globally optimal punishment for large cartels, and fully characterise it. Then, we show that for mall cartels, global …
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Profit-seeking firms can be induced to internalise the environmental damages caused by production via several policy instruments, a widely used one being emission permits. In a very influential paper, Laffont and Tirole (J Public Econ 62:127-140, 1996) point out that the allocation of pollution...
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