Choice of regulation is an important issue in policy making. In the environmental field, the polluting industries are … faced with regulation and costly abatement. We discuss a choice between two elements – an emission cap and a penalty rate … − as regulation instruments and analyze a situation in which both a regulator and the polluting industry seek to minimize …

that centralized regulation is preferable. Under asymmetric information about the firms' costs, lobbying induces a unique … may be social welfare enhancing. -- regulation ; Lobbying ; asymmetric information ; energy markets. …

We develop a dynamic regulation game for a stock externality under asymmetric information and future market uncertainty …. Within this framework, regulation is characterized as the implementation of a welfare-maximization program conditional on …-consistent policy rules that implement the stochastic first best as long as a future market exists. We apply our theory to carbon …