We analyze how environmental taxes should be optimally levied when the regulators and firms face costs uncertainties in a Stackelberg-Cournot game. We allow linear-quadratic payoffs functions coupled with an affine information structure encompassing common and private information with noisy...

tThis paper presents an analysis of environmental policy in imperfectly competitive market with publicly disclosed and privately-held information about costs. We examine the potential asymmetry-reducing role of disclosure and its impact on setting environmental taxes. From a policy perspective,...