Exogenous targeting instruments as a solution to group moral hazards

Spraggon, John M.

doi:10.1016/s0047-2727(01)00088-3

Cited by 78 publications

(102 citation statements)

References 21 publications

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“…In our experimental setting we chose the group size to be equal to 6 players as in Spraggon (2002). Each player can choose a level of input in the strategy space f0; 1; :::; 30g.…”

Section: Practical Speci…cationsmentioning

confidence: 99%

“…Available experimental …ndings provide mixed evidence: e¢ ciency is higher under external damage, i.e. if ambient pollution a¤ects non-polluters (Spraggon, 2002(Spraggon, , 2003 than under internal damage, i.e. if ambient pollution a¤ects polluters themselves (Cochard et al, 2005).…”

Section: Introductionmentioning

confidence: 99%

“…It can be shown that whenever the marginal tax rate is equal to the marginal damage of the ambient pollution the socially optimal level of ambient pollution equals the unique Nash equilibrium of the emission game. The e¤ectiveness of the ambient tax has been demonstrated by Segerson (1988), Shortle et al (1998), Shortle and Horan (2001) and investigated experimentally by Spraggon (2002Spraggon ( , 2003, Cochard et al (2005) and Giordana and Willinger (2008). Hansen (1988) proposed an asymmetric version of the instrument, the ambient tax, for which the subsidy part is ommitted.…”

Section: Introductionmentioning

confidence: 99%

“…While Spraggon (2002Spraggon ( , 2003 found that the ambient tax/subsidy instrument is highly e¢ -cient (91.34%), Cochard et al's (2005) experiment showed that the ambient tax/subsidy instrument is rather ine¢ cient (-41.38%) when the ambient pollution a¤ects the polluters themselves. However they also found that an asymmetric ambient tax instrument (without the subsidy part as in Hansen, 1998) allows to reach a high level of e¢ ciency (80.08%) even if ambient pollution a¤ects the polluters themselves.…”

Section: Introductionmentioning

confidence: 99%

“…However they also found that an asymmetric ambient tax instrument (without the subsidy part as in Hansen, 1998) allows to reach a high level of e¢ ciency (80.08%) even if ambient pollution a¤ects the polluters themselves. Still, the ambient tax instrument is much less e¢ cient when the externality a¤ects the polluters themselves (Cochard et al,2005) than when the victims are disjoint from the polluters (Spraggon, 2002(Spraggon, , 2003.…”

Section: Introductionmentioning

confidence: 99%

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Performance of the Ambient Tax: Does the Nature of the Damage Matter?

Willinger

Ammar

Ennasri

2013

Environ Resource Econ

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The ambient tax is often considered as an e¢ cient instrument to achieve a …rst best outcome of ambient pollution when the regulator is less informed than the polluters. Since the ambient tax was never implemented in the …eld, empirical evidence is missing. Available experimental …ndings provide mixed evidence: e¢ ciency is higher under external damage, i.e. if ambient pollution a¤ects non-polluters (Spraggon, 2002(Spraggon, , 2003 than under internal damage, i.e. if ambient pollution a¤ects polluters themselves (Cochard et al., 2005). Since these two types of experiments relied on very di¤erent designs, it is worthwhile to compare them under a common experimental design. Our main …nding is that the ambient tax is equally e¢ cient under external damage than under internal damage.

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“…In our experimental setting we chose the group size to be equal to 6 players as in Spraggon (2002). Each player can choose a level of input in the strategy space f0; 1; :::; 30g.…”

Section: Practical Speci…cationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Performance of the Ambient Tax: Does the Nature of the Damage Matter?

Willinger

Ammar

Ennasri

2013

Environ Resource Econ

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The impact of information on behavior under an ambient‐based policy for regulating nonpoint source pollution

Miao

Fooks

Guilfoos

et al. 2016

Water Resources Research

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Different levels of water quality information lead to different behaviorEnhanced water quality information improves social efficiency Abstract: Stemming from Segerson [1988], literature on nonpoint source pollution shows that ambient-based regulatory policies can induce polluters in a common watershed to comply with an exogenously determined emissions standard. This study uses laboratory economic experiments in a spatially heterogeneous setting to test the effectiveness of an ambient tax/subsidy policy in a setting with realistic in-stream nutrient transport dynamics when varying levels of ambient information about the pollution is available to the agents and the regulator. We find that increasing the frequency of ambient monitoring improves the spatial allocation of emissions reductions. In particular with more frequent monitoring, the ambient-based policy induces firms further from the monitoring point to reduce emissions significantly more than downstream firms. Overall, the results suggest that enhanced information, especially enhanced temporal resolution, leads to efficiency gains.Index terms: 6309 1880 1846 0478

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