|Appears in Collections:||Economics Journal Articles|
|Peer Review Status:||Refereed|
|Title:||Location choice by households and polluting firms: An evolutionary approach|
|Authors:||Dijkstra, Bouwe R|
de, Vries Frans
evolutionary game theory
|Citation:||Dijkstra BR & de Vries F (2006) Location choice by households and polluting firms: An evolutionary approach, European Economic Review, 50 (2), pp. 425-446.|
|Abstract:||This paper examines several policy regimes to deal with the problem of households suffering from environmental damage by firms in the same region. We employ an evolutionary framework to analyze migration movements in the course of time, since firms and households will not relocate immediately in response to payoff differentials. We show that taxation gives firms and households an incentive to stay away from each other. Laissez faire (compensation) only gives households (firms) an incentive to stay away from firms (households). We find that taxation creates the right incentives to reach a local welfare maximum. However, when there are multiple local maxima, circumstances may arise under which compensation leads to a better outcome than taxation.|
|Rights:||The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.|
|Affiliation:||University of Nottingham|
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