Self Regulation and Negotiated Agreements: Complements or Substitutes

Indiana University

Description

Niveau: Supérieur, Doctorat, Bac+8
Self-Regulation and Negotiated Agreements: Complements or Substitutes? Thomas P. Lyonand John W. Maxwelly January 31, 2011 Abstract The literature on negotiated agreements generally assumes away the possibility of corporate self-regulation. Yet in practice ?rms may have incentives to self-regulate in order to in?uence the outcome of negotia- tions. When the two are studied jointly in a single model, the question arises whether self-regulation and negotiated agreements are complements or substitutes. We present a general model of the two tools, in which the ?rm can self-regulate both before and after negotiations regarding a vol- untary agreement. In such a setting, we ?nd that the two instruments are complements. 1 Introduction One of the most striking changes in environmental policy in recent years has been the substitution of voluntary programs for mandatory government reg- ulation. Negotiated agreements, public voluntary programs, and industry self-regulation all have become more prominent as command-and-control reg- ulation, and even market-based instruments, have attracted less interest.1 A substantial literature has developed exploring the performance of these new vol- untary approaches, with rather mixed results. [Alberini and Segerson (2002); Baranzini and Thalmann (2003); OECD (2005); Morgenstern and Pizer (2007); Lyon and Maxwell (2007)] This literature has shown that voluntary approaches Dow Chair of Sustainable Science, Technology and Commerce, University of Michigan Business School, Ann Arbor, MI, 48109.

• untary approaches


• administration has


• ?rm


• voluntary programs


• performance track


• self regulation


• regarding climate


• bene?cial when


• self

Sujets

• University
• Self-regulation

Informations

• Publié par: profil-zyak-2012
• Nombre de lectures: 10
• Langue: English

Extrait

Self-RegulationandNegotiatedAgreements: ComplementsorSubstitutes? ThomasP.Lyon ∗ andJohnW.Maxwell † January31,2011 Abstract Theliteratureonnegotiatedagreementsgenerallyassumesawaythe possibilityofcorporateself-regulation.Yetinpracticefirmsmayhave incentivestoself-regulateinordertoinfluencetheoutcomeofnegotia- tions.Whenthetwoarestudiedjointlyinasinglemodel,thequestion ariseswhetherself-regulationandnegotiatedagreementsarecomplements orsubstitutes.Wepresentageneralmodelofthetwotools,inwhichthe firmcanself-regulatebothbeforeandafternegotiationsregardingavol- untaryagreement.Insuchasetting,wefindthatthetwoinstrumentsare complements. 1Introduction Oneofthemoststrikingchangesinenvironmentalpolicyinrecentyearshas beenthesubstitutionofvoluntaryprogramsformandatorygovernmentreg- ulation.Negotiatedagreements,publicvoluntaryprograms,andindustry self-regulationallhavebecomemoreprominentascommand-and-controlreg- ulation,andevenmarket-basedinstruments,haveattractedlessinterest. 1 A substantialliteraturehasdevelopedexploringtheperformanceofthesenewvol- untaryapproaches,withrathermixedresults.[AlberiniandSegerson(2002); BaranziniandThalmann(2003);OECD(2005);MorgensternandPizer(2007); LyonandMaxwell(2007)]Thisliteraturehasshownthatvoluntaryapproaches ∗ DowChairofSustainableScience,TechnologyandCommerce,UniversityofMichigan BusinessSchool,AnnArbor,MI,48109.Email:[e-mail]. † KelleySchoolofBusiness,IndianaUniversity,Bloomington,IN,47405.Email:jw- [e-mail]. 1 Informationdisclosureprograms,bothmandatoryandvoluntary,havealsobecomemore popularinrecentyears,buttheyarebeyondthescopeofthepresentpaper. 1