Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax

Hamet Sarr (1) , Mohamed Ali Bchir (1) , Francois Cochard (2) , Anne Rozan (1)

1 UMR GESTE - Gestion Territoriale de l'Eau et de l'environnement
2 CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190)

The “Average Pigouvian Tax” (APT) was proposed by Suter et al. (2008) to reduce the financial burden of the standard ambient tax. This instrument consists in a standard ambient tax divided by the number of firms, which requires polluters to cooperate in order to achieve the social optimum. To enable polluters to cooperate, communication is allowed. We introduce different types of communication: cheap talk, exogenous costly communication (communication is imposed), and endogenous costly communication (conducted on a voluntary basis after a vote). Our experiment confirms that the instrument induces polluters to reduce their emissions under cheap talk. However, we find that group emissions are less reduced when communication is costly. This result still holds even when we endogenize communication by introducing a voting phase.

Mots clés: nonpoint source pollution; ambient tax; social dilemma; cooperation; cheap talk; costly communication; vote

Domaines: Pricing [q-fin.PR]

Hamet Sarr, Mohamed Ali Bchir, Francois Cochard, Anne Rozan. Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax. 2016. ⟨hal-01375078⟩