Journal article
Profit-enhancing environmental policy: Uninformed regulation in an entry-deterrence model
Journal of regulatory economics, Vol.50(2), pp.146-163
10/01/2016
Abstract
This paper considers a polluting firm, subject to environmental policy, who seeks to deter the entry of potential competitors. We investigate under which conditions firm profits are enhanced by regulation. We show that, contrary to common belief, inefficient firms may support environmental regulation when their production is especially polluting. In addition, we evaluate how this result is affected by the regulator's prior beliefs accuracy and the environmental damage from pollution.
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Details
- Title
- Profit-enhancing environmental policy
- Creators
- Ana Espinola-Arredondo - Washington State UniversityFelix Munoz-Garcia - Washington State University
- Publication Details
- Journal of regulatory economics, Vol.50(2), pp.146-163
- Academic Unit
- Economic Sciences, School of
- Publisher
- Springer Nature
- Number of pages
- 18
- Identifiers
- 99900971131601842
- Language
- English
- Resource Type
- Journal article