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

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	More Stringent Cap or Higher Penalty Fee? Dealing with Procrastination in Environmental Protection
	Guo, Dongmei 1; Wang, Shouyang 2; Zhao, Lin 2
	2020-05-01
发表期刊	ANNALS OF ECONOMICS AND FINANCE
ISSN	1529-7373
卷号	21 期号:1 页码:41-69
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.
关键词	Environmental policy Time-inconsistent preferences Present bias Procrastination Cap-and-trade Principal-agent
收录类别	SCI
语种	英语
资助项目	National Social Science Foundation of China[18BTJ004]
WOS研究方向	Business & Economics
WOS类目	Economics
WOS记录号	WOS:000531067000002
出版者	WUHAN UNIV JOURNALS PRESS
引用统计
文献类型	期刊论文
条目标识符	http://ir.amss.ac.cn/handle/2S8OKBNM/51422
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.Cent Univ Finance & Econ, Sch Econ, Beijing 100081, Peoples R China 2.Chinese Acad Sci, Acad Math & Syst Sci, Beijing 100190, 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.