Optimal quasi-market choice in the presence of pollution externalities

User Fees With “Feebates”: Meeting Revenue and Allocative Objectives Without Tradeoff, Even When Numbers are Small

“…While this second component has at times been overlooked (e.g. Burrows, 1979), firm f must perceive both cost components to guarantee that its entry and exit incentives are efficient (Collinge and Oates, 1982;Collinge and Bailey, 1983). A recent article by Kohn (1994) shows that, in a perfectly competitive general equilibrium, there is no reason to worry about a separate entry/exit condition to ensure that firms perceive the true total cost of their activities.…”

Environmental policy à la carte: Letting firms choose their regulation

“…In a setup with asymmetric information but no uncertainty, incentive schemes can be found that render it optimal for firms to reveal private technological information [1,3,8,17]. However, a regulation often has to be designed before actual costs are known and may not be adjusted frequently in response to cost changes, because such adjustments are subject to administrative delays, incur costs, and can induce inefficiencies due to strategic firm behavior [10].…”

“…This approach differs from previous incentives schemes, such as Collinge and Bailey [1], in that we consider both asymmetric information and uncertainty. In addition, we constrain our analysis to policies that do not need to be adjusted to cost shocks.…”

“…In addition, we constrain our analysis to policies that do not need to be adjusted to cost shocks. This rules out incentive schemes, such as the Vickrey auction considered in [1]. 1 There are three motivations for investigating the above regulatory setting.…”

“…This rules out incentive schemes, such as the Vickrey auction considered in [1]. 1 There are three motivations for investigating the above regulatory setting. First, we want to inquire whether the welfare gains characterized in Mandell [9] can be realized with less demanding information requirements, and thus for a broader range of applications.…”