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...

This article reviews the economic literature on voluntary approaches to environmental regulation. In the last few years there has been a rapid growth in the use of voluntary actions and programs to address environmental concerns. These approaches can be placed into three general categories: (1)...