We model the interaction between a profi t-maximizing firm and an activist using an in nite-horizon dynamic stochastic game. The fi rm enhances its reputation through self-regulation : voluntary provision of an activity that reduces a negative externality. We show that in equilibrium the...

We model the interaction between a profit-maximizing firm and an activist using an infinite-horizon dynamic stochastic game. The firm enhances its reputation through “self-regulation”: voluntary provision of an abatement activity that reduces a negative externality. We show that in...

An increasingly popular instrument for solving environmental problems is the "public voluntary agreement (VA)", in which government offers modest technical assistance and positive publicity to firms that reach certain environmental goals. Prior papers treat such agreements as a superior,...