A note on relative violation arguments in expected penalty functions for permit non-compliance
Research output: Contribution to journal › Article › peer-review
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.
|Number of pages||3|
|Journal||Applied Economics Letters|
|Publication status||Published - 2009|