SELF-REGULATION AND REGULATORY DISCRETION: WHY FIRMS MAY BE RELUCTANT TO SIGNAL GREEN

A large literature studies why firms self-regulate and "signal green." However, it has ignored that regulators have enforcement discretion, and may act strategically. We fill this gap. We build a game theoretic model of whether a firm should signal its type through substantial self-regulation. We find self-regulation is a double-edged swo...More