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A Bargaining Model of Voluntary Environmental Agreements

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Working paper
Author/s: 
Paola Manzini and Marco Mariotti
Issue number: 
2000.081
Publisher: 
FEEM
Year: 
2000
We present an explicit model of firm-regulator negotiation in a market with several firms. We describe how the regulatory surplus is distributed between firms and regulator, and analyze the impact of various oligopoly parameters on the resulting level of environmental regulation. our main result is that a “toughest firm principle” holds: the outcome of negotiation is essentially determined by the firm with the most aggressive attitude towards environmental control.
Developed by Paolo Gittoi