We analyse the regulation of nonpoint source pollution. In particular, we study the use of peer monitoring to sustain co-operative abatement by a group of polluters. Delegation to a group of polluters has sometimes been proposed under a policy of so called voluntary abatement accords. By solving...

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...

Abstract In a model of nonpoint source pollution, we extend the theory of ambient taxes to the case when polluters might cooperate. We show that regulation through ambient taxes is severely constrained when the degree of cooperation among polluters is unknown to the regulator. On the other hand,...

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...