Bargaining around cost–benefit standards

Guttel, Ehud; Leshem, Shmuel

doi:10.1016/j.jpubeco.2013.03.004

Cited by 3 publications

(8 citation statements)

References 22 publications

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“…10 While our paper only considers payments from victims to polluters, payments in the opposite direction can be analyzed in the same way. However, there are important differences between Guttel and Leshem (2013a) and our paper. Guttel and Leshem (2013a) provide a static partial-equilibrium model of a single polluter and many victims, where the polluter is required to take abatement measures such that total welfare is maximized.…”

Section: Literature Reviewmentioning

confidence: 69%

“…9 Innes (2008) shows that only first-party damage rights lead to the optimal outcome in case relocation by A would result in another negative externality. Guttel and Leshem (2013a) show how welfare can fall when a polluter buys out some of his victims. 10 While our paper only considers payments from victims to polluters, payments in the opposite direction can be analyzed in the same way.…”

Section: Literature Reviewmentioning

confidence: 99%

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Payments from Households to Distant Polluting Firms

Dijkstra

2022

Environ Resource Econ

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We investigate a novel way to encourage separation between firms, causing local pollution, and their victims (households): payments from households to distant polluting firms. These payments do not require monitoring of firms’ emissions or their abatement costs. In our model, households and firms can choose from two locations (A and B, with A larger than B). Households incur environmental damage from firms in the same location. Under laissez faire, payments from households in one location (say A) to firms in the other location (say B) will prompt firms to move from A to B and to stay there, thus reducing damage to households in A. The maximum that households are willing to pay temporarily is the amount that currently makes them indifferent between A and B. The payments make A less attractive to firms as well as to households. The unique positive-payment equilibrium implements the global welfare optimum where laissez faire does not. We examine from which starting points this payment equilibrium can be reached.

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Section: Literature Reviewmentioning

confidence: 69%

Section: Literature Reviewmentioning

confidence: 99%

Payments from Households to Distant Polluting Firms

Dijkstra

2022

Environ Resource Econ

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“…2012). 5 Inefficient waivers of litigation are explored in Hylton (2000) and Guttel and Leshem (2013). Potentially inefficient waivers of class litigation are explored in Lavie (2013).…”

Section: Illustrationmentioning

confidence: 99%

“…21 The incentive identified here has been explored, in different forms, in previous articles. Guttel and Leshem (2013) study property buyouts that serve the roughly same effect as litigation waivers in the nuisance context. Che and Spier (2008) examine divide-and-conquer strategies that a defendant can use, after the dispute arises, in litigation against a class of victims.…”

Section: Efficient Class Action Waiversmentioning

confidence: 99%