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Firm behaviour under regulatory control of stochastic environmental wastes by probabilistic constraints
Affiliation:1. School of Economics and Trade, Hunan University, China;2. Antai College of Economics and Management, Shanghai Jiao Tong University, China;3. Department of Agricultural and Resource Economics, UWA School of Agriculture and Environment, University of Western Australia, Australia;4. Institute of Politics and Economics, Nanjing Audit University, China;1. Department of Economics, Finance and International Business, Grenon School of Business, Assumption University, Worcester, MA 01609, United States of America;2. Formerly, U.S. Department of Agriculture, Economic Research Service, Washington, DC 20250, United States of America;3. Department of Agricultural and Resource Economics, University of Tennessee Institute of Agriculture, Knoxville, TN 37996, United States of America
Abstract:Environmental regulation by deterministic constraints is not really meaningful when, as is common in practice, effluent generation is inherently stochastic. In such a case, “probabilistic constraints” are more appropriate. This paper examines the regulatory control of firm behaviour under mean and percentile probabilistic constraints.
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