Regulating altruistic agents

Heyes, A. and Kapur, Sandeep (2011) Regulating altruistic agents. Canadian Journal of Economics 44 (1), pp. 227-246. ISSN 0008-4085.

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Official URL: http://dx.doi.org/10.1111/j.1540-5982.2010.01630.x

Abstract

Altruism or 'regard for others' can encourage self-restraint among generators of negative externalities, thereby mitigating the externality problem. We explore how introducing impure altruism into standard regulatory settings alters regulatory prescriptions. The optimal calibration of both quantitative controls and externality taxes is affected. It also leads to surprising results on the comparative performance of instruments. Under quantity-based regulation, welfare is increasing in the propensity for altruism in the population; under price-based regulation, the relationship is non-monotonic. Price-based regulation is preferred when the population is either predominantly altruistic or predominantly selfish; quantity-based regulation is preferred for cases in between. JEL classification: D62, D64

Metadata

Item Type:	Article
School:	Birkbeck Schools and Departments > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
Research Centre:	Innovation Management Research, Birkbeck Centre for
Depositing User:	Administrator
Date Deposited:	22 Jun 2011 14:21
Last Modified:	15 Oct 2019 08:57
URI:	http://eprints.bbk.ac.uk/id/eprint/3643

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