Testing ambient pollution instruments with heterogeneous agents

Abstract

This paper investigates the ability of ambient pollution instruments to induce a group of heterogeneous agents to choose a target outcome. Six controlled laboratory sessions were conducted with heterogeneous agents facing ambient pollution instruments with lumpsum or proportional fines and bonuses. Sessions are compared with a study of these exogenous targeting instruments and homogeneous agents using complete information and certainty (J. Public Econ. 84 (2) (2002) 427). The data show that contracts can indeed be developed that induce heterogeneous groups to choose the target outcome; however, substantial inefficiency and inequality were observed. r

Empowering neighbors versus imposing regulations: An experimental analysis of pollution reduction schemes

“…Private payoffs are given by a concave benefit function B(E i ) that increases at a decreasing rate up to a maximum that corresponds to the level of uncontrolled emissions. The experiment implemented the following quadratic functional form, similar to that used in Spraggon (2002) and much of the subsequent literature: Spraggon (2004) shows that when firms have asymmetric payoff functions, so that some are larger capacity polluters, then significant inefficiencies and inequities exist at the individual level and suggests that the tax/subsidy targeting mechanism may not be optimal in such cases. Suter et al (2009) compare the behavior of homogenous and heterogeneous firms and find more strategic actions by firms in the heterogeneous capacity treatments.…”

“…The liability of each source depends on the aggregate emissions from the entire group of polluters, not just its own level of emissions, since these emissions are unobservable to the regulator. Empirical research using economic experiments provides evidence that such targeting instruments can improve efficiency Oxoby 2009, 2010;Suter, Vossler and Poe, 2009;Oxoby and Spraggon 2008;Vossler et al 2006;Cochard, Willinger and Xepapadeas 2005;Alpizar, Requate and Schram 2004;Poe et al 2004;Spraggon 2004Spraggon , 2002.…”

Efficiency of Nonpoint Source Pollution Instruments: An Experimental Study

“…11. Spraggon (2004) compares an ambient tax/subsidy and a group fine when polluters have heterogeneous payoffs. 12.…”

Quels instruments pour gérer les prélèvements individuels en eau souterraine ?

“…Il s'agit d'imposer à chaque agriculteur une taxe proportionnelle à sa surface irriguée, lorsque le niveau de la nappe est inférieur à un niveau objectif. La principale limite de cet instrument est son caractère inéquitable quand les agriculteurs sont économique-ment hétérogènes : à l'équilibre, le prélè-vement des agriculteurs à forte capacité de prélèvement devant être réduit dans une proportion plus importante que les petits, les premiers fournissant donc davantage d'effort que les seconds (Spraggon, 2004).…”