Affordable Access

Reputation and the Control of Pollution

Authors
Disciplines
  • Ecology
  • Geography

Abstract

This paper investigates the effectiveness of reputation in inducing a polluting firm to selfregulate its emissions when consumers have imperfect information. In particular, we ask to what extent must consumers reward and punish the firm before it chooses self-regulation as its dominant strategy? We find that if payoffs in the stage game are such that both the consumer and the polluting firm have beliefs that are consistent with each others’ behaviors, then the firm has a positive probability of playing clean in each period of a finite game. Further, we find that a weak reward/punishment scheme may have an adverse effect on the environment, and that there are both environmental and welfare gains associated with strengthening the scheme.

There are no comments yet on this publication. Be the first to share your thoughts.

Statistics

Seen <100 times
0 Comments

More articles like this

Reputation and the control of pollution

on Ecological Economics Jan 01, 2003

Pollution control.

on Science Jul 06, 1973

The control of pollution.

on The Journal of the Institute o... November 1987
More articles like this..