Environmental public good provision under robust decision making

Angelopoulos, K. , Economides, G. and Philippopoulos, A. (2017) Environmental public good provision under robust decision making. Oxford Economic Papers, 69(1), pp. 118-142. (doi: 10.1093/oep/gpw041)

Abstract

We study public good provision in a two-country dynamic setup with environmental externalities. In this framework, we examine robust decision making under potential misspecification of the process that describes the evolution of the environmental public good. Robust policies, arising from fear of model misspecification, help to correct for the inefficiencies associated with free riding and thus increase the provision of the public good. As a result, there can be welfare gains from robust policies even when the fear of model misspecification proves to be unfounded.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Angelopoulos, Professor Konstantinos
• Authors: Angelopoulos, K., Economides, G., and Philippopoulos, A.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: Oxford Economic Papers
• Publisher: Oxford University Press
• ISSN: 0030-7653
• ISSN (Online): 1464-3812
• Published Online: 17 September 2016
• Copyright Holders: Copyright © 2016 Oxford University Press
• First Published: First published in Oxford Economic Papers 69(1): 118-142
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher