Firm's Choice of Regulatory Instruments to Reduce Pollution: A Transaction Cost Approach
Stanford GSB Research Paper No. 1806
41 Pages Posted: 31 Aug 2003
Date Written: May 2003
Abstract
This paper extends transaction costs economics to analyze relationships between firms and regulatory agencies. It compares the economic efficiency of firm-agency governance structures for dealing with pollution reduction. The transaction costs of three ideal type governance structures are analyzed: command and control regulation, market based mechanisms, and negotiated agreements. We propose that the choice of governance structure will depend on the strategies firms are pursuing given their transaction attributes and market opportunities.
Suggested Citation: Suggested Citation
Delmas, Magali A. and Delmas, Magali A. and Marcus, Alfred A., Firm's Choice of Regulatory Instruments to Reduce Pollution: A Transaction Cost Approach (May 2003). Stanford GSB Research Paper No. 1806, Available at SSRN: https://ssrn.com/abstract=417603 or http://dx.doi.org/10.2139/ssrn.417603
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