Prices vs. quantities with incomplete enforcement
This paper extends Weitzman's (1974) "Prices vs. Quantities" to allow for incomplete enforcement. Whether the regulator uses prices (e.g., taxes) or quantities (e.g., tradeable quotas), a first-best design is always inefficient in the presence of incomplete enforcement. A second-best...
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| Format: | Working Paper |
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MIT Center for Energy and Environmental Policy Research
2009
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| Online Access: | http://hdl.handle.net/1721.1/45094 |