A signalling model of environmental overcompliance

Arbeitspapier

I model environmental overcompliance as a signalling device. In the model, a benevolent government may or may not tighten environmental standards. Production costs under the stricter environmental regulation are private information to the firms, and tightening environmental policy is socially desirable only if such costs are sufficiently low. The key assumption of the model is that firms differ in the cost of complying, and so those firms that enjoy a comparative advantage may actually benefit from tighter regulation. In these circumstances, such firms may overcomply in order to signal to the government that compliance costs are low, thus inducing the government to enforce stricter regulation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 77. 2000

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Energy, Environmental, Health, and Safety Law ; Regulation and Industrial Policy: General ; Renewable Resources and Conservation: General
• Subject: Environmental regulation ; overcompliance ; signalling ; asymmetric firms ; Umweltstandard ; Umweltpolitik ; Folgekosten ; Asymmetrische Information ; Signalling ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Denicolò, Vincenzo
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/155130
• Last update: 10.03.2025, 11:43 AM CET