On International compensations for environmental stocks
- Cite this article as:
- Stähler, F. Environmental and Resource Economics (1996) 8: 1. doi:10.1007/BF00340650
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This paper sheds some light on the possible implications of compensations which are paid for the maintenance of an environmental stock. It shows that serious complications can arise if the resource-owner may influence the compensation price strategically. If the incentive to raise the compensation price dominates the preservation incentive, the steady-state stock falls short from that which is voluntarily held. Whether compensation policies can neglect this feature depends crucially on the institutional setting which determines the compensation price.