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Articles 1 - 7 of 7
Full-Text Articles in Business
The Regulatory Choice Of Noncompliance In Emissions Trading Programs, John K. Stranlund
The Regulatory Choice Of Noncompliance In Emissions Trading Programs, John K. Stranlund
John K. Stranlund
This paper addresses the following question: To achieve a fixed aggregate emissions target cost-effectively, should emissions trading programs be designed and implemented to achieve full compliance, or does allowing a certain amount of noncompliance reduce the costs of reaching the emissions target? The total costs of achieving the target consist of aggregate abatement costs, monitoring costs, and the expected costs of collecting penalties from noncompliant firms. Under common assumptions, I show that allowing noncompliance is cost-effective only if violations are enforced with an increasing marginal penalty. However, one can design a policy that induces full compliance with a constant marginal …
Enforcing 'Self-Enforcing' International Environmental Agreements, David M. Mcevoy, John K. Stranlund
Enforcing 'Self-Enforcing' International Environmental Agreements, David M. Mcevoy, John K. Stranlund
John K. Stranlund
Theoretical analyses of international environmental agreements (IEAs) have typically employed the concept of self-enforcing agreements to predict the number of parties to such an agreement. The term self-enforcing, however, is a bit misleading. The concept refers to the stability of cooperative agreements, not to enforcing these agreements once they are in place. Most analyses of IEAs simply ignore the issue of enforcing compliance. In this paper we analyze a static IEA game in which parties to an agreement finance an independent enforcement body with the power to monitor the parties’ compliance to the terms of an IEA and impose penalties …
On The Production Of Homeland Security Under True Uncertainty, John K. Stranlund, Barry C. Field
On The Production Of Homeland Security Under True Uncertainty, John K. Stranlund, Barry C. Field
John K. Stranlund
Homeland security against possible terrorist attacks involves making decisions under true uncertainty. Not only are we ignorant of the form, place, and time of potential terrorist attacks, we are also largely ignorant of the likelihood of these attacks. In this paper, we conceptualize homeland security under true uncertainty as society’s immunity to unacceptable losses. We illustrate and analyze the consequences of this notion of security with a simple model of allocating a fixed budget for homeland security to defending the pathways through which a terrorist may launch an attack and to mitigating the damage from an attack that evades this …
Within And Between Group Variation Of Individual Strategies In Common Pool Resources: Evidence From Field Experiments, Maria Alejandra Velez, James J. Murphy, John K. Stranlund
Within And Between Group Variation Of Individual Strategies In Common Pool Resources: Evidence From Field Experiments, Maria Alejandra Velez, James J. Murphy, John K. Stranlund
John K. Stranlund
With data from framed common pool resource experiments conducted with artisanal fishing communities in Colombia, we estimate a hierarchical linear model to investigate within-group and between-group variation in individual harvest strategies across several institutions. Our results suggest that communication serves to effectively coordinate individual strategies within groups, but that these coordinated strategies vary considerably across groups. In contrast, weakly enforced regulatory restrictions on individual harvests (as well as unregulated open access) produce significant variation in the individual strategies within groups, but these strategies are roughly replicated across groups so that there is little between-group variation.
Centralized And Decentralized Management Of Local Common Pool Resources In The Developing World: Experimental Evidence From Fishing Communities In Colombia, Maria Alejandra Velez, James J. Murphy, John K. Stranlund
Centralized And Decentralized Management Of Local Common Pool Resources In The Developing World: Experimental Evidence From Fishing Communities In Colombia, Maria Alejandra Velez, James J. Murphy, John K. Stranlund
John K. Stranlund
This paper uses experimental data to test for a complementary relationship between formal regulations imposed on a community to conserve a local natural resource and nonbinding verbal agreements to do the same. Our experiments were conducted in the field in three regions of Colombia. Each group of five subjects played 10 rounds of an open access common pool resource game, and 10 additional rounds under one of five institutions— communication alone, two external regulations that differed by the level of enforcement, and communication combined with each of the two regulations. Our results suggest that the hypothesis of a complementary relationship …
Risk Aversion And Compliance In Markets For Pollution Control, John K. Stranlund
Risk Aversion And Compliance In Markets For Pollution Control, John K. Stranlund
John K. Stranlund
This paper examines the effects of risk aversion on compliance choices in markets for pollution control. A firm’s decision to be compliant or not is independent of its manager’s risk preference. However, noncompliant firms with risk averse managers will have lower violations than otherwise identical firms with risk neutral managers. The violations of noncompliant firms with risk averse managers are independent of differences in their benefits from emissions and their initial allocations of permits if and only if their managers’ utility functions exhibit constant absolute risk aversion. However, firm-level characteristics do impact violation choices when managers have coefficients of absolute …
Price-Based Vs. Quantity-Based Environmental Regulation Under Knightian Uncertainty: An Info-Gap Robust Satisficing Perspective, John K. Stranlund, Yakov Ben-Haim
Price-Based Vs. Quantity-Based Environmental Regulation Under Knightian Uncertainty: An Info-Gap Robust Satisficing Perspective, John K. Stranlund, Yakov Ben-Haim
John K. Stranlund
Conventional wisdom among environmental economists is that the relative slopes of the marginal social benefit and marginal social cost functions determine whether a price-based or quantity-based environmental regulation leads to higher expected social welfare. We revisit the choice between price-based vs. quantity-based environmental regulation under Knightian uncertainty; that is, when uncertainty cannot be modeled with known probability distributions. Under these circumstances, the policy objective cannot be to maximize the expected net benefits of emissions control. Instead, we evaluate an emissions tax and an aggregate abatement standard in terms of maximizing the range of uncertainty under which the welfare loss from …