More Stringent Cap or Higher Penalty Fee? Dealing with Procrastination in Environmental Protection

	More Stringent Cap or Higher Penalty Fee? Dealing with Procrastination in Environmental Protection
	Guo, Dongmei 2; Wang, Shouyang 1; Zhao, Lin 1
刊名	ANNALS OF ECONOMICS AND FINANCE
	2020-05-01
卷号	21 期号:1 页码:41-69
关键词	Environmental policy Time-inconsistent preferences Present bias Procrastination Cap-and-trade Principal-agent
ISSN号	1529-7373
英文摘要	People tend to procrastinate on immediate-cost activities. In environmental protection, resource conservation and pollution control commonly involve substantial immediate costs but long-delayed benefits, giving entrepreneurs an incentive to remain inactive. This paper assumes that procrastination is induced by "present bias," and examines how the government can design policies that promote efficiency in the regulation of procrastinating entrepreneurs. Our main findings are threefold. First, entrepreneurial present bias makes the environmental protection investment increase faster as the compliance deadline approaches. Second, the compliance cost incurred by the entrepreneur increases with the degrees of present bias and entrepreneurial naivete. Third, relative to the traditional policy for rational entrepreneurs without present bias, the optimal policy delivers a more stringent cap for naive entrepreneurs, but a higher penalty fee for sophisticated entrepreneurs.
资助项目	National Social Science Foundation of China[18BTJ004]
WOS研究方向	Business & Economics
语种	英语
出版者	WUHAN UNIV JOURNALS PRESS
WOS记录号	WOS:000531067000002
内容类型	期刊论文
源URL	[http://ir.amss.ac.cn/handle/2S8OKBNM/51421]
专题	中国科学院数学与系统科学研究院
通讯作者	Zhao, Lin
作者单位	1.Chinese Acad Sci, Acad Math & Syst Sci, Beijing 100190, Peoples R China 2.Cent Univ Finance & Econ, Sch Econ, Beijing 100081, Peoples R China
推荐引用方式 GB/T 7714	Guo, Dongmei,Wang, Shouyang,Zhao, Lin. More Stringent Cap or Higher Penalty Fee? Dealing with Procrastination in Environmental Protection[J]. ANNALS OF ECONOMICS AND FINANCE,2020,21(1):41-69.
APA	Guo, Dongmei,Wang, Shouyang,&Zhao, Lin.(2020).More Stringent Cap or Higher Penalty Fee? Dealing with Procrastination in Environmental Protection.ANNALS OF ECONOMICS AND FINANCE,21(1),41-69.
MLA	Guo, Dongmei,et al."More Stringent Cap or Higher Penalty Fee? Dealing with Procrastination in Environmental Protection".ANNALS OF ECONOMICS AND FINANCE 21.1(2020):41-69.