Study on Pollution Cost Control Model under Asymmetric Information Based on Principal Agent

2021 ◽  
Vol 9 (5) ◽  
pp. 549-557
Author(s):  
Lina Wang ◽  
Koen Milis ◽  
Stephen Poelmans
Keyword(s):  
Asymmetric Information ◽  
Pollution Control ◽  
Cost Control ◽  
Cost Model ◽  
Control Level ◽  
Quality Level ◽  
Principal Agent ◽  
Control Cost ◽  
Control Quality ◽  
Pollutant Discharge

Abstract Pollution cost control is key to solve pollution problem. The paper takes pollution control cost of pollution control contract between management authority and pollutant discharge enterprise as research object, considers pollution control quality level, pollution control quality inspection and pollution control cost model, and establishes pollution control cost model of management authority and pollutant discharge enterprise, including rational constraints of pollutant discharge enterprise. And it analyzes principal-agent relationship between the two under condition of asymmetric information, and un-observability of pollution control level is shown as hiding information of sewage enterprises. In essence, it is problem of adverse selection in principal-agent. Pollution control cost of management is objective function. The first order condition of pollution control cost of sewage enterprise is transformed into state space equation, and optimal control of problem is solved by using maximum principle. In particular, management authority, as principal, uses pollution control provisions to reward, punish and encourage pollutant discharge enterprises as agents.

scholarly journals Reactions to (the absence of) control and workplace arrangements: experimental evidence from the internet and the laboratory

2020 ◽  
Vol 23 (4) ◽  
pp. 933-960
Author(s):  
Katrin Schmelz ◽  
Anthony Ziegelmeyer
Keyword(s):  
Experimental Evidence ◽  
Social Distance ◽  
Control Level ◽  
The Internet ◽  
Principal Agent ◽  
Working From Home

Abstract This paper reports an experiment designed to assess the influence of workplace arrangements on the reactions to (the absence of) control. We compare behavior in an Internet and a laboratory principal-agent game where the principal can control the agent by implementing a minimum effort requirement. Then the agent chooses an effort costly to her but beneficial to the principal. Our design captures meaningful differences between working from home and working at the office arrangements. Online subjects enjoy greater anonymity than lab subjects, they interact in a less constrained environment than the laboratory, and there is a larger physically-oriented social distance between them. Control is significantly more effective online than in the laboratory. Positive reactions to the principal’s choice not to control are observed in both treatments, but they are significantly weaker online than in the laboratory. Principals often choose the highest control level, which maximizes their earnings.

Indian Principal-Agent Theory, Or, How Varuṇa Helps the King to be Just

2016 ◽  
Vol 70 (2) ◽  
Author(s):  
Harald Wiese
Keyword(s):  
Asymmetric Information ◽  
Principal Agent ◽  
Principal Agent Theory ◽  
Agent Theory

AbstractEconomic principal-agent theory deals with asymmetric information. It has two aspects. (i) If one person is better informed than another one, the former may outwit the latter.

scholarly journals Contribution of worker participation to increase the efficiency of firms

2004 ◽  
Vol 35 (3) ◽  
pp. 23-29
Author(s):  
P. De Villiers ◽  
G. Kooy
Keyword(s):  
South Africa ◽  
Asymmetric Information ◽  
Principal Agent ◽  
Worker Participation ◽  
Principal Agent Problem ◽  
Conditions Of Employment ◽  
Increase Efficiency

There are many factors that may lead to inefficiencies in a firm. One reason is the existence of a principal-agent problem. Linked with this problem is asymmetric information, unaligned motives of principals and agents, distrust (that was rampant in the era of apartheid in South Africa, but more recently the Basic Conditions of Employment Act can fulfil this role) and conflict. Worker participation schemes can help to alleviate this problem and different forms of worker participation schemes are discussed that can increase efficiency of firms.

Implications of government subsidies for waste cooking oil considering asymmetric information

Kybernetes ◽  
2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rui Yang ◽  
Wansheng Tang ◽  
Jianxiong Zhang
Keyword(s):  
Asymmetric Information ◽  
Conversion Rate ◽  
Waste Cooking Oil ◽  
Principal Agent ◽  
High Type ◽  
Content Type ◽  
Cooking Oil ◽  
Incentive Effects ◽  
The Government ◽  
Uncertainty Level

Purpose Without proper treatment, waste cooking oil (WCO) will bring serious environmental and health hazards, which can be effectively alleviated by converting it into biofuel. Subsidies from the government usually play a significant role in encouraging recycling activities and supporting sustainable supply chain. This paper aims to quantitatively investigate the incentive effects of government subsidies under asymmetric information. Design/methodology/approach This paper applies the principal–agent contract to compare the incentive effects of the two widely used subsidy modes (raw material price subsidy [MS] and finished product sale subsidy [FS]) in a management system which consists of the government and a bio-firm where the bio-firm’s conversion rate of the WCO remains as private information. Findings Results indicate that the two subsidy modes have the same performance under symmetric information, while under asymmetric information, the government always prefers the MS mode which is more environment-friendly. Besides, if the average conversion rate is large or the uncertainty level of the asymmetric information is moderate, the MS mode is Pareto-improving compared with the FS mode for the government and the high-type bio-firm. Only when the average conversion rate is small or the uncertainty level is very small/very large, the high-type bio-firm welcomes the FS mode. Originality/value Different from the existing literature, this paper applies the principal–agent contract into the WCO management system and quantitatively compares the two subsidy modes taking the practical problem of asymmetric information into consideration.

Zur Reform des Rating-(Un)Wesens

2010 ◽  
Vol 61 (1) ◽  
Author(s):  
Hanno Beck ◽  
Helmut Wienert
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Empirical Evidence ◽  
Economies Of Scale ◽  
Conflicts Of Interest ◽  
Principal Agent ◽  
Double Blind ◽  
Rating Agencies ◽  
Market Inefficiencies ◽  
Set Up

SummaryThe market for ratings suffers from several inefficiencies: asymmetric information and moral hazard lead to conflicts of interest and principal-agent-problems. Moreover, network externalities and economies of scale lead to a lack of competition in the market for ratings. There is empirical evidence for market inefficiencies as ratingshopping, herding or slow adjustment of wrong ratings to a changed environment. As a remedy for these problems, we suggest a fund where rating-orders are pooled and rated by means of a double-blind-approach. Each issuer of a security gives his product into a pool and rating agencies which meet the standards of the pool are free to tender for the mandate to rate the product. Several aspects how to set up such a pool and possible problems are being addressed in this paper.

Sign in / Sign up

Export Citation Format

Share Document