Abstract
Models of firm noncompliance under imperfectly enforced standards and permit regimes normally include a level violation argument in the firm's expected penalty function, analogous to the constraint term in a Lagrangian function. This article suggests that a relative violation argument may be more appropriate in many cases and demonstrates how this can change our predictions about firm behaviour under permit regimes.
Original language | English |
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Pages (from-to) | 421-423 |
Number of pages | 3 |
Journal | Applied Economics Letters |
Volume | 16 |
Issue number | 4 |
DOIs | |
Publication status | Published - 2009 |