We investigate the ability of the damage based tax mechanism to induce socially optimal outcomes in a controlled laboratory environment which incorporates important aspects of nonpoint pollution problems. Our experimental setting combines a strictly convex damage function with uncertainty in...

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. In case (A), they actually participate in a game in which their payoff depends on all participants' decisions and on...