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The role of asymmetric information in environmental policy settings : three applications

Gian Paolo Ansaloni-2012-01-01-Royal Holloway Digital Repository (Royal Holloway University of London)
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We present three models of the role of asymmetric informat ion in environmental protection. Chapter one considers the market for a green credence good - a good whose environmental characteristics are not observed by the consumer) even ex post - in the presence of environmentally-conscious consumers. Producers may choose to advertise their products. However, if communication is not regulated it can degenerate into 'cheap talk'. 'Ve explore the scope for credible transmission of environmental informat ion by green producers, and the limits on it. In Chapter two we develop some similar themes in an experimental setting, with the focus again on consumer reactions to producer-provided information on the environmental attributes of goods, and the potential role of government to improve social welfare by manipulating the use of certification. In Chapter three the focus is somewhat different, whilst maintaining the theme of the role of information asymmetries in an environmental policy setting

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We present three models of the role of asymmetric informat ion in environmental protection. Chapter one considers the market for a green credence good - a good whose environmental characteristics are not observed by the consumer) even ex post - in the presence of environmentally-conscious consumers. Producers may choose to advertise their products. However, if communication is not regulated it can degenerate into 'cheap talk'. 'Ve explore the scope for credible transmission of environmental informat ion by green producers, and the limits on it. In Chapter two we develop some similar themes in an experimental setting, with the focus again on consumer reactions to producer-provided information on the environmental attributes of goods, and the potential role of government to improve social welfare by manipulating the use of certification. In Chapter three the focus is somewhat different, whilst maintaining the theme of the role of information asymmetries in an environmental policy setting

Keywords

Credence goodInformation asymmetryBusinessExploitPerfect informationIncentiveReputationGovernment (linguistics)

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