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- Title
Information Acquisition and Disclosure of Environmental Risk.
- Authors
Sengupta, Aditi
- Abstract
Firms often invest resources in acquiring scientific evidence to evaluate the actual (more accurate) risk (i.e., the probability of occurrence) of any potential environmental hazards that might result from their own production processes and use this information in taking optimal preventive measures. In a symmetric duopoly where the acquired information about environmental risk is observed privately by the firms, I show that requiring firms to publicly report this information increases the strategic incentive of firms to invest in information acquisition. However, the net expected environmental damage of an investing firm is lower if there is no public disclosure.
- Subjects
HAZARDS; ENVIRONMENTAL risk; ENVIRONMENTAL impact analysis; PRECAUTIONARY principle; DISCLOSURE
- Publication
B.E. Journal of Economic Analysis & Policy, 2017, Vol 17, Issue 2, p46
- ISSN
2194-6108
- Publication type
Article
- DOI
10.1515/bejeap-2017-0043