, Volume 5, Issue 2, pp 183-197

An optimal tax/subsidy for output and pollution control under asymmetric information in oligopoly markets

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This paper constructs an optimal incentive tax/subsidy scheme in an oligopoly market with pollution, as a generalization of the Loeb-Magat scheme, which is nondiscriminatory and requires less information for implementation than the conventional ones. Some interesting properties of the scheme are discussed.