We consider the problem of regulating many polluting firms when their individual emissions are unobservable. The tension between the dual regulatory goals of pollution deterrence and funding of remediation is examined under two different constraints: that penalty revenues be sufficient to fund...

We consider the problem of regulating many polluting firms when their individual emissions are unobservable. The tension between the dual regulatory goals of pollution deterrence and funding remediation is examined under two different constraints: that penalty revenues be sufficient to fund...