GAME-THEORETIC ANALYSES OF ENFORCEMENT OF ENVIRONMENTAL LAWS AND REGULATIONS

Game-theoretic models are developed for describing and analyzing the inspection and enforcement process, especially as it relates to environmental laws and regulations in North America. Based on these models, systems using irrevocable control orders can be compared to those relying on court determination of guilt and punishment. The cost-effectiveness of environmental enforcement can be systematically assessed in terms of factors such as the private gains for violators, the costs of inspection, penalties, and the social value of deterring violations. The policy implications of the analysis, especially with reference to environmental protection, are emphasized.