| Título: | Moral hazard and tradeable pollution emission permits |
| Autores: | Álvarez González, Francisco ; Camiña, Ester |
| Tipo de documento: | texto impreso |
| Editorial: | Instituto Complutense de Estudios Internacionales (ICEI), 2008 |
| Dimensiones: | application/pdf |
| Nota general: |
cc_by_nc info:eu-repo/semantics/openAccess |
| Idiomas: | |
| Palabras clave: | Estado = Publicado , Materia = Ciencias Sociales: Economía: Mercados bursátiles y financieros , Tipo = Documento de trabajo o Informe técnico |
| Resumen: |
We consider a market for pollution emission permits in a setting in which pollution, generated as by-product of firms’ activity, is determined as the sum of firm-specific random shocks and each firm's abatement effort. In such a setting, an expected utility maximizer society demands an optimal abatement effort from each firm. As long as the abatement effort is decided by each firm and not observed by the environmental regulator, a moral hazard problem arises in which: (i) firms (agents) have informational advantage with respect to the regulator (principal) and (ii) the only link among firms is precisely the market for permits, which is nothing but a chance to trade permits (contracts) once they have been assigned by the regulator. Our main point is to raise doubts on the social desirability of the -competitive- market, since it enlarges the firms’ strategy space. We theoretically characterize conditions under which the market improves (or worsens) the firms with respect to an autarchy scenario. |
| En línea: | https://eprints.ucm.es/id/eprint/9925/1/WP02-08.pdf |
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