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A Procedure for Negotiating Pollution Reduction under Information Asymmetry. Surface Water Quality Case

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Abstract

This paper considers an alternative approachto surface water quality management whensociety is faced with the need to reduce waterpollution in a region with a complicatedregulatory environment. The paper is focusedon a specific kind of negotiation betweenpolluters and an authority, leading toresolution of the problem when there is theinformation asymmetry between the authorityand the polluters, i.e., the true pollutionabatement costs are known to the pollutersonly. This paper reports a laboratory experimentalcase prepared at the Department ofEnvironmental Economics, the University ofEconomics in Prague. The comparison withtheoretical computed first-best results underconditions of full information is included.Political and economic aspects of thesuggested approach are also discussed.

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Authors and Affiliations

  1. Department of Environmental Economics, University of Economics, W. Churchilla 4, 130 67, Prague 3, Czech Republic

    Petr Šauer, Antonín Dvořák, Aleš Lisa & Petr Fiala

Authors
  1. Petr Šauer
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  2. Antonín Dvořák
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  3. Aleš Lisa
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  4. Petr Fiala
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Correspondence to Petr Šauer.

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Šauer, P., Dvořák, A., Lisa, A. et al. A Procedure for Negotiating Pollution Reduction under Information Asymmetry. Surface Water Quality Case . Environmental and Resource Economics 24, 103–119 (2003). https://doi.org/10.1023/A:1022886831892

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  • DOI: https://doi.org/10.1023/A:1022886831892

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