Groeneveld, Rolf; Springborn, Michael; Costello, Christopher - In: Environmental & Resource Economics 58 (2014) 4, pp. 627-647
We examine in discrete time the management of a flow pollutant that causes damage when it crosses a fixed but unknown threshold. The manager sequentially chooses a pollution level that allows learning about the threshold, thereby improving future decisions. If crossed, damage can be reversed at...