The Clean Development Mechanism (CDM) offers abatement cost savings under the Kyoto Protocol by allowing credits for emission reductions obtained in signatory developing countries. The paper shows that it is necessary to include technology transfers in the CDM to obtain correct incentives for...

Collective environmental agreements (CEAs) refer to agreements negotiated between a group of polluting firms and a public regulatory body. The article analyses some potential problems with CEAs. First, we study free-riding. We show how the incentive constraint imposed by moral hazard determines...

The paper models the combined use of taxation and voluntary agreements when there is asymmetric information between the regulator and industry on the firms' actual emissions. The model incorporates the following features: 1) the regulator does not know the firm's special production...

In many cases consumers cannot observe firms' investment in quality or safety, but have only beliefs on the average quality of the industry. In addition, the outcome of the collective investment game of the firms may be stochastic since firms cannot control perfectly the technology or external...