On the Acceptability of the Ambient Tax Mechanism:An Experimental Investigation

Our objective in this paper is to assess the acceptability of the ambient tax. Concretely,we ask subjects to choose between (A) an ambient tax and (B) an individual tax system. Incase (A), they actually participate in a game in which their payout depends on all participants'decisions and on natural variability as would be the case in the real world if an ambient taxwas implemented. In case (B) they simply earn a sure payout, which is supposed to reect theirmaximal prot under the individual tax system. We take the percentage of agents preferringthe ambient tax to a given sure payout level as an indicator of the acceptability of the ambienttax given this sure payout level. Our experimental results mitigate the common belief that am-bient taxes are totally unacceptable. If the "sure" alternative to the ambient tax policy is verycostly for the polluters, for example because it involves high inspection costs, polluters mighteventually prefer being liable to an ambient tax.