A bargaining model of voluntary environmental agreements

Paola Manzini*, Marco Mariotti

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

24 Citations (Scopus)


We present an explicit model of firm-regulator negotiations in a market with several firms. We describe how the regulatory surplus is distributed between firms and regulator, and analyse the impact of various parameters on the resulting level of environmental regulation. Our main result is that a 'toughest firm principle' holds: the outcome of negotiations is essentially determined by the firm with the most aggressive attitude towards environmental control.

Original languageEnglish
Pages (from-to)2725-2736
Number of pages12
JournalJournal of Public Economics
Issue number12
Publication statusPublished - Dec 2003

Bibliographical note

Copyright 2004 Elsevier B.V., All rights reserved.


  • Multiperson bargaining
  • Regulation
  • Voluntary agreements


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