The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy
Resumen:
Recent theoretical developments show the conditions under which it is cost-effective for the regulator to induce perfect compliance in cap-and-trade programs. These conditions are based on the ability that a regulator with perfect information has to induce the firms to emit any desired level with different combinations of the number of permits supplied to the market and the monitoring probability, assuming that firms are expected profit maximizers. In this paper, we test this hypothesis with a series of laboratory experiments. Our results suggest that firms may behave significantly different from what these models predict precisely when the different combinations of the supply of permits and the monitoring probability induce compliance versus noncompliance. More specifically, by allowing noncompliance in a manner consistent with theory, the regulator could produce a decrease in emissions and an increase in the market price of tradable permits that is not predicted by the theoretical models. The implications for the cost-effective design of environmental policy are discussed.
| 2016 | |
|
Emission standards Emissions trading Enforcement Environmental policy Laboratory experiments |
|
| Inglés | |
| Universidad de Montevideo | |
| REDUM | |
|
https://hdl.handle.net/20.500.12806/2445
https://doi.org/10.1515/bejeap-2014-0202 |
|
| Acceso abierto | |
| Attribution-NonCommercial-NoDerivatives 4.0 Internacional |
| _version_ | 1807356681265348608 |
|---|---|
| author | Caffera, Marcelo |
| author2 | Chávez, Carlos |
| author2_role | author |
| author_facet | Caffera, Marcelo Chávez, Carlos |
| author_role | author |
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| bitstream.url.fl_str_mv | http://redum.um.edu.uy/bitstream/20.500.12806/2445/1/10.1515_bejeap-2014-0202.pdf http://redum.um.edu.uy/bitstream/20.500.12806/2445/2/license_rdf http://redum.um.edu.uy/bitstream/20.500.12806/2445/3/license.txt http://redum.um.edu.uy/bitstream/20.500.12806/2445/4/10.1515_bejeap-2014-0202.pdf.txt http://redum.um.edu.uy/bitstream/20.500.12806/2445/5/10.1515_bejeap-2014-0202.pdf.jpg |
| collection | REDUM |
| dc.contributor.filiacion.es.fl_str_mv | Caffera, Marcelo. Universidad de Montevideo, Uruguay Chávez, Carlos. Universidad de Talca, Chile |
| dc.creator.none.fl_str_mv | Caffera, Marcelo Chávez, Carlos |
| dc.date.accessioned.none.fl_str_mv | 2024-06-12T20:03:05Z |
| dc.date.available.none.fl_str_mv | 2024-06-12T20:03:05Z |
| dc.date.issued.es.fl_str_mv | 2016 |
| dc.description.abstract.none.fl_txt_mv | Recent theoretical developments show the conditions under which it is cost-effective for the regulator to induce perfect compliance in cap-and-trade programs. These conditions are based on the ability that a regulator with perfect information has to induce the firms to emit any desired level with different combinations of the number of permits supplied to the market and the monitoring probability, assuming that firms are expected profit maximizers. In this paper, we test this hypothesis with a series of laboratory experiments. Our results suggest that firms may behave significantly different from what these models predict precisely when the different combinations of the supply of permits and the monitoring probability induce compliance versus noncompliance. More specifically, by allowing noncompliance in a manner consistent with theory, the regulator could produce a decrease in emissions and an increase in the market price of tradable permits that is not predicted by the theoretical models. The implications for the cost-effective design of environmental policy are discussed. |
| dc.format.extent.es.fl_str_mv | pp. 727-753 |
| dc.format.mimetype.es.fl_str_mv | application/pdf |
| dc.identifier.doi.es.fl_str_mv | https://doi.org/10.1515/bejeap-2014-0202 |
| dc.identifier.issn.es.fl_str_mv | 1935-1682 |
| dc.identifier.uri.none.fl_str_mv | https://hdl.handle.net/20.500.12806/2445 |
| dc.language.iso.none.fl_str_mv | eng |
| dc.publisher.es.fl_str_mv | De Gruyter |
| dc.relation.ispartof.es.fl_str_mv | The B.E. Journal of Economic Analysis & Policy, vol. 16, n°2, 727-753 |
| dc.rights.es.fl_str_mv | Abierto |
| dc.rights.license.none.fl_str_mv | Attribution-NonCommercial-NoDerivatives 4.0 Internacional |
| dc.rights.none.fl_str_mv | info:eu-repo/semantics/openAccess |
| dc.rights.uri.*.fl_str_mv | http://creativecommons.org/licenses/by-nc-nd/4.0/ |
| dc.source.none.fl_str_mv | reponame:REDUM instname:Universidad de Montevideo instacron:Universidad de Montevideo |
| dc.subject.keyword.es.fl_str_mv | Emission standards Emissions trading Enforcement Environmental policy Laboratory experiments |
| dc.title.none.fl_str_mv | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy |
| dc.type.es.fl_str_mv | Artículo |
| dc.type.none.fl_str_mv | info:eu-repo/semantics/article |
| dc.type.version.es.fl_str_mv | Publicada |
| dc.type.version.none.fl_str_mv | info:eu-repo/semantics/publishedVersion |
| description | Recent theoretical developments show the conditions under which it is cost-effective for the regulator to induce perfect compliance in cap-and-trade programs. These conditions are based on the ability that a regulator with perfect information has to induce the firms to emit any desired level with different combinations of the number of permits supplied to the market and the monitoring probability, assuming that firms are expected profit maximizers. In this paper, we test this hypothesis with a series of laboratory experiments. Our results suggest that firms may behave significantly different from what these models predict precisely when the different combinations of the supply of permits and the monitoring probability induce compliance versus noncompliance. More specifically, by allowing noncompliance in a manner consistent with theory, the regulator could produce a decrease in emissions and an increase in the market price of tradable permits that is not predicted by the theoretical models. The implications for the cost-effective design of environmental policy are discussed. |
| eu_rights_str_mv | openAccess |
| format | article |
| id | REDUM_3c8cb5a6c86f19657af5581773a02179 |
| identifier_str_mv | 1935-1682 |
| instacron_str | Universidad de Montevideo |
| institution | Universidad de Montevideo |
| instname_str | Universidad de Montevideo |
| language | eng |
| network_acronym_str | REDUM |
| network_name_str | REDUM |
| oai_identifier_str | oai:redum.um.edu.uy:20.500.12806/2445 |
| publishDate | 2016 |
| reponame_str | REDUM |
| repository.mail.fl_str_mv | nolascoaga@um.edu.uy |
| repository.name.fl_str_mv | REDUM - Universidad de Montevideo |
| repository_id_str | 10501 |
| rights_invalid_str_mv | Attribution-NonCommercial-NoDerivatives 4.0 Internacional Abierto http://creativecommons.org/licenses/by-nc-nd/4.0/ |
| spelling | Attribution-NonCommercial-NoDerivatives 4.0 InternacionalAbiertohttp://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccess29379aa7-bd77-483a-9074-54df31de362e9b42c627-a3c8-425f-a478-23a2f0ec6700Caffera, Marcelo. Universidad de Montevideo, UruguayChávez, Carlos. Universidad de Talca, Chile2024-06-12T20:03:05Z2024-06-12T20:03:05Z20161935-1682https://hdl.handle.net/20.500.12806/2445https://doi.org/10.1515/bejeap-2014-0202pp. 727-753application/pdfengDe GruyterThe B.E. Journal of Economic Analysis & Policy, vol. 16, n°2, 727-753The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policyArtículoPublicadainfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleRecent theoretical developments show the conditions under which it is cost-effective for the regulator to induce perfect compliance in cap-and-trade programs. These conditions are based on the ability that a regulator with perfect information has to induce the firms to emit any desired level with different combinations of the number of permits supplied to the market and the monitoring probability, assuming that firms are expected profit maximizers. In this paper, we test this hypothesis with a series of laboratory experiments. Our results suggest that firms may behave significantly different from what these models predict precisely when the different combinations of the supply of permits and the monitoring probability induce compliance versus noncompliance. More specifically, by allowing noncompliance in a manner consistent with theory, the regulator could produce a decrease in emissions and an increase in the market price of tradable permits that is not predicted by the theoretical models. The implications for the cost-effective design of environmental policy are discussed.Emission standardsEmissions tradingEnforcementEnvironmental policyLaboratory experimentsreponame:REDUMinstname:Universidad de Montevideoinstacron:Universidad de MontevideoCaffera, MarceloChávez, CarlosORIGINAL10.1515_bejeap-2014-0202.pdf10.1515_bejeap-2014-0202.pdfapplication/pdf2049023http://redum.um.edu.uy/bitstream/20.500.12806/2445/1/10.1515_bejeap-2014-0202.pdfd8c3c5bcf4acd94c50c3183228402a7eMD51CC-LICENSElicense_rdflicense_rdfapplication/rdf+xml; charset=utf-8805http://redum.um.edu.uy/bitstream/20.500.12806/2445/2/license_rdf4460e5956bc1d1639be9ae6146a50347MD52LICENSElicense.txtlicense.txttext/plain; charset=utf-82117http://redum.um.edu.uy/bitstream/20.500.12806/2445/3/license.txt691ed290c8bf8671811a9242b7fc04b6MD53TEXT10.1515_bejeap-2014-0202.pdf.txt10.1515_bejeap-2014-0202.pdf.txtExtracted texttext/plain66691http://redum.um.edu.uy/bitstream/20.500.12806/2445/4/10.1515_bejeap-2014-0202.pdf.txt0e04dc8750b00d19d82866fb90bcb0d9MD54THUMBNAIL10.1515_bejeap-2014-0202.pdf.jpg10.1515_bejeap-2014-0202.pdf.jpgGenerated Thumbnailimage/jpeg1640http://redum.um.edu.uy/bitstream/20.500.12806/2445/5/10.1515_bejeap-2014-0202.pdf.jpga567515555bb4e4fd6835d1f09c23a08MD5520.500.12806/24452024-06-13 03:00:22.851oai:redum.um.edu.uy:20.500.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Universidadhttps://um.edu.uy/https://redum.um.edu.uy/oai/requestnolascoaga@um.edu.uyUruguayopendoar:105012024-06-13T06:00:22REDUM - Universidad de Montevideofalse |
| spellingShingle | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy Caffera, Marcelo Emission standards Emissions trading Enforcement Environmental policy Laboratory experiments |
| status_str | publishedVersion |
| title | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy |
| title_full | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy |
| title_fullStr | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy |
| title_full_unstemmed | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy |
| title_short | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy |
| title_sort | The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy |
| topic | Emission standards Emissions trading Enforcement Environmental policy Laboratory experiments |
| url | https://hdl.handle.net/20.500.12806/2445 https://doi.org/10.1515/bejeap-2014-0202 |
