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We investigate the features of optimal regulatory policies composed of pollution standards and probabilities of inspection, where fines for non-compliance depend not only on the degree of violation but also on non-gravity factors. We show that optimal policies can induce either compliance or...
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We study optimal policies composed of pollution standards, probabilities of inspection and fines dependant on the degree of noncompliance with the standards, in a context where regulated firms own private information. In contrast with previous literature, we show that optimal policies, being...
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