The deterrence effect of linear versus convex penalties in environmental policy: laboratory evidence

Caffera, Marcelo; Chávez, Carlos; Ardente, Analía

dc.rights.license	Attribution-NonCommercial-NoDerivatives 4.0 Internacional	*
dc.contributor.author	Caffera, Marcelo
dc.contributor.author	Chávez, Carlos
dc.contributor.author	Ardente, Analía
dc.date.accessioned	2022-05-04T19:01:37Z
dc.date.available	2022-05-04T19:01:37Z
dc.date.issued	2017	es
dc.identifier.uri	https://hdl.handle.net/20.500.12806/1355
dc.description.abstract	We study the individual compliance behavior of polluting firms in an experimental setting under two different penalty functions (a linear and a strictly convex) and two different regulatory instruments (emission standards and tradable pollution permits). We find that a convex penalty, as compared to a linear penalty, increases the market price of pollution permits and the violation rate of firms. The effect of the structure of the fine on the price of permits operates through an increase in the ask-prices of sellers, not on the bids by suppliers. With convex penalties, sellers are not willing to sell a permit at a price as low as with linear penalties. We do not observe an effect of convex penalties on the compliance status of firms with emission standards. These results call for attention on the possible effect that the type of penalties may have on the cost-effectiveness of pollution control programs based on tradable pollution permits.	es
dc.format.extent	32 p.	es
dc.format.mimetype	application/pdf	es
dc.language	eng	es
dc.publisher	Universidad de Montevideo, Facultad de Ciencias Empresariales y Economía, Departamento de Economía	es
dc.rights	Abierto	es
dc.rights.uri	http://creativecommons.org/licenses/by-nc-nd/4.0/	*
dc.subject	Environmental policy	es
dc.subject	Enforcement	es
dc.subject	Penalty structure	es
dc.subject	Emissions standards	es
dc.subject	Emissions trading	es
dc.subject	Laboratory experiments	es
dc.title	The deterrence effect of linear versus convex penalties in environmental policy: laboratory evidence	es
dc.type	Documento de trabajo	es
dc.contributor.filiacion	Caffera, Marcelo. Universidad de Montevideo, Uruguay	es
dc.contributor.filiacion	Chávez, Carlos. Universidad de Talca	es
dc.contributor.filiacion	Ardente, Analía. Ministerio de Economía y Finanzas, Uruguay	es
dc.type.version	Publicada	es