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Regulating altruistic agents

journal contribution
posted on 2023-06-08, 15:31 authored by Anthony Heyes, Sandeep Kapur
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.

History

Publication status

  • Published

Journal

Canadian Journal of Economics

ISSN

0008-4085

Publisher

Blackwell Publishing

Issue

1

Volume

44

Page range

227-246

Department affiliated with

  • Economics Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2013-10-11

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