| Abstract: |
| The paper studies the evolution of compliance and non-compliace firms in a setup of taxable emissions. Firms can either choose to comply with the emissions standard imposed by a public authority or violate them. Two different scenarios are analyzed, in fact, violation is considered either as a single option or is let to vary between low and high emissions. The latter induce a different level of fine if firms get caught. In a context of replicator dynamics, firms can switch between strategies according to a proportional rule of strategy evolution and the conditions for stability are investigated accounting for two distinct types of probability of inspection. |
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