Adoption Subsidy Versus Technology Standards Under Asymmetric Information
Summary Market-based instruments are believed to create more efficient incentives for firms to adopt new technologies than command-and-control policies. We compare the effects of a direct technology regulation and of an adoption subsidy under asymmetric information about the costs of technological a...
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| Veröffentlicht in: | De Economist (Netherlands) 2008-09, Vol.156 (3), p.241-267 |
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| container_title | De Economist (Netherlands) |
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| creator | Ossokina, Ioulia V. Swank, Otto H. |
| description | Summary
Market-based instruments are believed to create more efficient incentives for firms to adopt new technologies than command-and-control policies. We compare the effects of a direct technology regulation and of an adoption subsidy under asymmetric information about the costs of technological advances in controlling the socially undesirable activities. We show that the policy maker may want to commit to her policy. The reason is that asymmetric information about adoption costs induces the policy maker to set subsidy levels that increase over time; firms, expecting higher subsidies in the future, postpone investment. Direct regulation offers a commitment possibility that allows to prevent firms from postponing investment. |
| doi_str_mv | 10.1007/s10645-008-9093-2 |
| format | Article |
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Market-based instruments are believed to create more efficient incentives for firms to adopt new technologies than command-and-control policies. We compare the effects of a direct technology regulation and of an adoption subsidy under asymmetric information about the costs of technological advances in controlling the socially undesirable activities. We show that the policy maker may want to commit to her policy. The reason is that asymmetric information about adoption costs induces the policy maker to set subsidy levels that increase over time; firms, expecting higher subsidies in the future, postpone investment. Direct regulation offers a commitment possibility that allows to prevent firms from postponing investment.</description><identifier>ISSN: 0013-063X</identifier><identifier>EISSN: 1572-9982</identifier><identifier>DOI: 10.1007/s10645-008-9093-2</identifier><language>eng</language><publisher>Boston: Springer US</publisher><subject>abatement technologies ; Asymmetric information ; command-and-control instruments ; Costs ; D80 ; Economic Policy ; Economic Theory/Quantitative Economics/Mathematical Methods ; Economics ; Economics and Finance ; Economists ; H23 ; Investment ; Investment policy ; Market ; market-based instruments ; Mathematical analysis ; Microeconomics ; O38 ; Public Finance ; Regulated industries ; Regulation ; Safety standards ; Studies ; Subsidies ; Technological change ; Technology ; Technology adoption</subject><ispartof>De Economist (Netherlands), 2008-09, Vol.156 (3), p.241-267</ispartof><rights>The Author(s) 2008</rights><rights>Springer Science+Business Media, LLC. 2008</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c519t-173ad1e159918fdda8499e77b64add5839e02ff06e3d7ab13d120d375b4851f83</citedby><cites>FETCH-LOGICAL-c519t-173ad1e159918fdda8499e77b64add5839e02ff06e3d7ab13d120d375b4851f83</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://link.springer.com/content/pdf/10.1007/s10645-008-9093-2$$EPDF$$P50$$Gspringer$$Hfree_for_read</linktopdf><linktohtml>$$Uhttps://link.springer.com/10.1007/s10645-008-9093-2$$EHTML$$P50$$Gspringer$$Hfree_for_read</linktohtml><link.rule.ids>314,780,784,4008,27866,27924,27925,41488,42557,51319</link.rule.ids><backlink>$$Uhttp://econpapers.repec.org/article/kapdecono/v_3a156_3ay_3a2008_3ai_3a3_3ap_3a241-267.htm$$DView record in RePEc$$Hfree_for_read</backlink></links><search><creatorcontrib>Ossokina, Ioulia V.</creatorcontrib><creatorcontrib>Swank, Otto H.</creatorcontrib><title>Adoption Subsidy Versus Technology Standards Under Asymmetric Information</title><title>De Economist (Netherlands)</title><addtitle>De Economist</addtitle><description>Summary
Market-based instruments are believed to create more efficient incentives for firms to adopt new technologies than command-and-control policies. We compare the effects of a direct technology regulation and of an adoption subsidy under asymmetric information about the costs of technological advances in controlling the socially undesirable activities. We show that the policy maker may want to commit to her policy. The reason is that asymmetric information about adoption costs induces the policy maker to set subsidy levels that increase over time; firms, expecting higher subsidies in the future, postpone investment. Direct regulation offers a commitment possibility that allows to prevent firms from postponing investment.</description><subject>abatement technologies</subject><subject>Asymmetric information</subject><subject>command-and-control instruments</subject><subject>Costs</subject><subject>D80</subject><subject>Economic Policy</subject><subject>Economic Theory/Quantitative Economics/Mathematical Methods</subject><subject>Economics</subject><subject>Economics and Finance</subject><subject>Economists</subject><subject>H23</subject><subject>Investment</subject><subject>Investment policy</subject><subject>Market</subject><subject>market-based instruments</subject><subject>Mathematical analysis</subject><subject>Microeconomics</subject><subject>O38</subject><subject>Public Finance</subject><subject>Regulated industries</subject><subject>Regulation</subject><subject>Safety standards</subject><subject>Studies</subject><subject>Subsidies</subject><subject>Technological change</subject><subject>Technology</subject><subject>Technology adoption</subject><issn>0013-063X</issn><issn>1572-9982</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2008</creationdate><recordtype>article</recordtype><sourceid>C6C</sourceid><sourceid>X2L</sourceid><sourceid>7TQ</sourceid><sourceid>8G5</sourceid><sourceid>ABUWG</sourceid><sourceid>AFKRA</sourceid><sourceid>AZQEC</sourceid><sourceid>BENPR</sourceid><sourceid>CCPQU</sourceid><sourceid>DWQXO</sourceid><sourceid>GNUQQ</sourceid><sourceid>GUQSH</sourceid><sourceid>M2O</sourceid><recordid>eNp1kE9r3DAUxEVpoNu0H6A3k0NuTt-TbMs6LiFNlgZ6yB9yE1rrOXGylhzJLvjbR8YlhUIFI4GY-TEMY98QzhBAfo8IVVHmAHWuQImcf2AbLCXPlar5R7YBQJFDJR4-sc8xPkM6vKg2bLe1fhg777KbaR87O2f3FOIUs1tqnpw_-Mc5uxmNsybYmN05SyHbxrnvaQxdk-1c60NvFsAXdtSaQ6Svf95jdvfj4vb8Kr_-dbk7317nTYlqzFEKY5GwVArr1lpTF0qRlPuqMNaWtVAEvG2hImGl2aOwyMEKWe6LusS2FsfsdOUOwb9OFEfdd7Ghw8E48lPUQgIUWEMynvxjfPZTcKmb5iArwZVaTLiamuBjDNTqIXS9CbNG0Muyel1Wp2X1sqzmKfNzzQQaqHkPvJjBUuOd17-1MFhW6Z6T-BIVpksSScPyVaDmldRPY59ofKXFBHKPFP7W_H-FN8zhlJo</recordid><startdate>20080901</startdate><enddate>20080901</enddate><creator>Ossokina, Ioulia V.</creator><creator>Swank, Otto H.</creator><general>Springer US</general><general>Springer</general><general>Springer Nature B.V</general><scope>C6C</scope><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>0-V</scope><scope>0U~</scope><scope>1-H</scope><scope>3V.</scope><scope>7TQ</scope><scope>7WY</scope><scope>7WZ</scope><scope>7XB</scope><scope>87Z</scope><scope>8AO</scope><scope>8BJ</scope><scope>8FK</scope><scope>8FL</scope><scope>8G5</scope><scope>ABUWG</scope><scope>AFKRA</scope><scope>ALSLI</scope><scope>AZQEC</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DHY</scope><scope>DON</scope><scope>DPSOV</scope><scope>DWQXO</scope><scope>FQK</scope><scope>FRNLG</scope><scope>F~G</scope><scope>GNUQQ</scope><scope>GUQSH</scope><scope>JBE</scope><scope>K60</scope><scope>K6~</scope><scope>KC-</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>M2L</scope><scope>M2O</scope><scope>MBDVC</scope><scope>PQBIZ</scope><scope>PQBZA</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope></search><sort><creationdate>20080901</creationdate><title>Adoption Subsidy Versus Technology Standards Under Asymmetric Information</title><author>Ossokina, Ioulia V. ; Swank, Otto H.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c519t-173ad1e159918fdda8499e77b64add5839e02ff06e3d7ab13d120d375b4851f83</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2008</creationdate><topic>abatement technologies</topic><topic>Asymmetric information</topic><topic>command-and-control instruments</topic><topic>Costs</topic><topic>D80</topic><topic>Economic Policy</topic><topic>Economic Theory/Quantitative Economics/Mathematical Methods</topic><topic>Economics</topic><topic>Economics and Finance</topic><topic>Economists</topic><topic>H23</topic><topic>Investment</topic><topic>Investment policy</topic><topic>Market</topic><topic>market-based instruments</topic><topic>Mathematical analysis</topic><topic>Microeconomics</topic><topic>O38</topic><topic>Public Finance</topic><topic>Regulated industries</topic><topic>Regulation</topic><topic>Safety standards</topic><topic>Studies</topic><topic>Subsidies</topic><topic>Technological change</topic><topic>Technology</topic><topic>Technology adoption</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Ossokina, Ioulia V.</creatorcontrib><creatorcontrib>Swank, Otto H.</creatorcontrib><collection>Springer Nature OA Free Journals</collection><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>ProQuest Social Sciences Premium Collection</collection><collection>Global News & ABI/Inform Professional</collection><collection>Trade PRO</collection><collection>ProQuest Central (Corporate)</collection><collection>PAIS Index</collection><collection>Access via ABI/INFORM (ProQuest)</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ABI/INFORM Global (Alumni Edition)</collection><collection>ProQuest Pharma Collection</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>ProQuest Central (Alumni) (purchase pre-March 2016)</collection><collection>ABI/INFORM Collection (Alumni Edition)</collection><collection>Research Library (Alumni Edition)</collection><collection>ProQuest Central (Alumni Edition)</collection><collection>ProQuest Central UK/Ireland</collection><collection>Social Science Premium Collection</collection><collection>ProQuest Central Essentials</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>PAIS International</collection><collection>PAIS International (Ovid)</collection><collection>Politics Collection</collection><collection>ProQuest Central Korea</collection><collection>International Bibliography of the Social Sciences</collection><collection>Business Premium Collection (Alumni)</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>ProQuest Central Student</collection><collection>Research Library Prep</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Business Collection (Alumni Edition)</collection><collection>ProQuest Business Collection</collection><collection>ProQuest Politics Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Professional Standard</collection><collection>ABI/INFORM Global</collection><collection>Political Science Database</collection><collection>Research Library</collection><collection>Research Library (Corporate)</collection><collection>ProQuest One Business</collection><collection>ProQuest One Business (Alumni)</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central Basic</collection><jtitle>De Economist (Netherlands)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Ossokina, Ioulia V.</au><au>Swank, Otto H.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Adoption Subsidy Versus Technology Standards Under Asymmetric Information</atitle><jtitle>De Economist (Netherlands)</jtitle><stitle>De Economist</stitle><date>2008-09-01</date><risdate>2008</risdate><volume>156</volume><issue>3</issue><spage>241</spage><epage>267</epage><pages>241-267</pages><issn>0013-063X</issn><eissn>1572-9982</eissn><abstract>Summary
Market-based instruments are believed to create more efficient incentives for firms to adopt new technologies than command-and-control policies. We compare the effects of a direct technology regulation and of an adoption subsidy under asymmetric information about the costs of technological advances in controlling the socially undesirable activities. We show that the policy maker may want to commit to her policy. The reason is that asymmetric information about adoption costs induces the policy maker to set subsidy levels that increase over time; firms, expecting higher subsidies in the future, postpone investment. Direct regulation offers a commitment possibility that allows to prevent firms from postponing investment.</abstract><cop>Boston</cop><pub>Springer US</pub><doi>10.1007/s10645-008-9093-2</doi><tpages>27</tpages><oa>free_for_read</oa></addata></record> |
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| ispartof | De Economist (Netherlands), 2008-09, Vol.156 (3), p.241-267 |
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| source | RePEc; PAIS Index; SpringerNature Journals; EBSCOhost Business Source Complete |
| subjects | abatement technologies Asymmetric information command-and-control instruments Costs D80 Economic Policy Economic Theory/Quantitative Economics/Mathematical Methods Economics Economics and Finance Economists H23 Investment Investment policy Market market-based instruments Mathematical analysis Microeconomics O38 Public Finance Regulated industries Regulation Safety standards Studies Subsidies Technological change Technology Technology adoption |
| title | Adoption Subsidy Versus Technology Standards Under Asymmetric Information |
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