Regulation of Pollution in the Laboratory: Random Inspections, Ambient Inspections, and Commitment Problems
34 Pages Posted: 7 Jan 2016
Date Written: December 2015
Abstract
We compare experimentally a traditional random inspection policy and a variant where the agency may carry out a preliminary inspection of the level of ambient pollution before implementing any individual inspection. Since the agency may have an incentive to announce high inspection probabilities and then secretly renege on its announcement to avoid implementing costly inspections, we are also interested in the agency's commitment power. We find that overall, ambient inspections increase efficiency but the effect is weaker than expected when the agency has no commitment power; and polluters' reactions to the lack of commitment power of the agency vary depending on whether the agency uses ambient inspections or not.
Keywords: commitment problems, experiments, nonpoint source pollution, random inspections, regulation of pollution
JEL Classification: C92, H23, Q53, Q58
Suggested Citation: Suggested Citation
Here is the Coronavirus
related research on SSRN
Regulation of Pollution in the Laboratory: Random Inspections, Ambient Inspections, and Commitment Problems
This is a Wiley-Blackwell Publishing paper. Wiley-Blackwell Publishing charges $42.00 .
File name: BOER.pdf
Size: 0K
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.
