Textbook Notes (368,330)
Canada (161,803)
Economics (1,074)
EC238 (54)
Karen Huff (33)
Chapter 14

Chapter 14 EC238.docx

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Department
Economics
Course
EC238
Professor
Karen Huff
Semester
Fall

Description
EC238 Chapter 14 – Compliance Costs, Uncertainty, and Information Week 7 Uncertainty and Information -A second-best decision rule for regulators when there is uncertainty about the MAC or MD curve is to minimize the social loss associated with the choice of policy. Social loss is the area between the MD and MAC curves from the actual pollution level to the socially efficient level Definitions: Information revelation incentives – use of a policy instrument to induce a person or firm to reveal information about the shape and location of a curve of interest to the regulator Private compliance costs – the total abatement costs incurred by a polluter
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