Firm's Choice of Regulatory Instruments to Reduce Pollution: A Transaction Cost Approach
Magali A. Delmas
University of California, Los Angeles (UCLA)
Alfred A. Marcus
University of Minnesota - Twin Cities - Carlson School of Management
Stanford GSB Research Paper No. 1806
This paper extends transaction costs economics to analyze relationships between firms and regulatory agencies. It compares the economic efficiency of firm-agency governance structures for dealing with pollution reduction. The transaction costs of three ideal type governance structures are analyzed: command and control regulation, market based mechanisms, and negotiated agreements. We propose that the choice of governance structure will depend on the strategies firms are pursuing given their transaction attributes and market opportunities.
Number of Pages in PDF File: 41working papers series
Date posted: August 31, 2003
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