A Penalty System as Enforcement Device of Policy Measures Under Incomplete Information

نویسندگان

  • Alexander Kritikos
  • Alexander S. Kritikos
چکیده

In enforcing policy measures under incomplete information neither an individual nor a collective penalty may generate sufficient incentive compatibility. Individual monitoring may be avoided, while collective penalties may lead to multiple Nash-equilibria. In this paper it is shown that by combining elements of both kind of penalties these problems are solved: circumventing monitoring devices does not pay and multiple Nash-equilibria are excluded. Socially optimal behavior is selected as unique Nash-equilibrium.

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تاریخ انتشار 2000