Converting Technology to Mitigate Environmental Damage

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dc.contributor.authorNault, Barrie R
dc.contributor.authorLevi, Maurice D.
dc.date.accessioned2015-05-25T22:08:26Z
dc.date.available2015-05-25T22:08:26Z
dc.date.issued2004-08
dc.description*INFORMS: unless published under the open access option, the publisher will provide a specific copy of the paper that can be posted to a web page (https://www.informs.org/Find-Research-Publications/INFORMS-Journals/Rights-Permissions#work.) Article deposited according to publisher's policies 05/22/2015en_US
dc.description.abstractThere are many situations where policy makers would like to induce firms to make a major discrete conversion in production technology to help the environment. This paper examines how heterogeneity in the operating condition of firms’ plant and equipment, which cannot be observed by policy makers, can affect the choice between incentives to encourage conversion to a cleaner technology. By relating different conditions of firms’ plant and equipment to production costs, extent of environmental damage, and cost of conversion to a cleaner technology, we show when a perfectly discriminating incentive to encourage conversion is not feasible. In addition, we show that firms with plant and equipment in better condition will convert their technology to mitigate their environmental damage, and firms with plant and equipment in poorer condition will not. This and a series of additional results lead to conditions under which an administratively simple uniform lump-sum incentive to switch to cleaner technology is preferable to one based on output. These results and conditions extend to cases where there are network externalities in conversion, and where there is strategic timing in firms’ choice of when to convert.en_US
dc.identifier.citationLevi, M.D., and B.R. Nault, “Converting Technology to Mitigate Environmental Damage,” Management Science, 50, 8 (August 2004), 1015-1030.en_US
dc.identifier.doihttp://dx.doi.org/10.11575/PRISM/28791
dc.identifier.issn0025-1909‎
dc.identifier.otherDOI 10.1287
dc.identifier.urihttp://hdl.handle.net/1880/50440
dc.language.isoenen_US
dc.publisherINFORMSen_US
dc.publisher.corporateUniversity of Calgaryen_US
dc.publisher.departmentManagement Information Systemsen_US
dc.publisher.facultyHaskayne School of Businessen_US
dc.publisher.institutionUniversity of Calgaryen_US
dc.rightsAn error occurred on the license name.*
dc.rights.uriAn error occurred getting the license - uri.*
dc.subjectTechnology conversionen_US
dc.subjectEnvironmental managementen_US
dc.subjectTaxes & subsidiesen_US
dc.subjectCapital vintageen_US
dc.subjectIncentivesen_US
dc.titleConverting Technology to Mitigate Environmental Damageen_US
dc.typejournal article
thesis.degree.disciplineManagement Information Systemsen_US
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