| In this dissertation we consider the use of information as a regulatory tool. The simplest economic models often assume an environment with perfect information. Relaxing this restrictive and unrealistic assumption can significantly change the results of our models, making them more realistic, but often also illustrating the inefficiencies that may arise in the presence of informational imperfections. We investigate government's potential role in information provision and its effect on market outcomes.; We consider an industry facing intensified competition from imports that needs to retool its production process to restore its international competitiveness. If this investment project has positive net present value (NPV), efficient capital markets will provide financing and retooling occurs. When managers have more information about market conditions than shareholders, however, prudent investment may not occur. We show that a financially sound investment may not occur at equilibrium in a two country, perfectly competitive model if an asymmetry exists between the information sets of shareholders and managers. In such a case, the act of petitioning for protection by the industry (and protection itself) can facilitate investments in technological upgrading that would not otherwise occur. Petitioning for protection signals the quality of the investment project while the tariff shifts rents to the domestic industry making the investment payoffs more favorable. Finally, we show that the equilibrium strategy of the domestic government allows lobbying (signal), but responds with free trade policy.; Building on the literature concerning the Environmental Kuznets curve, we develop and test a simple economic model of toxic releases United States counties. We use a twofold measure of environmental disamenity associated with toxic releases: the level and toxicity of releases. We find that in the United States, a concave relationship between income and release levels exists for many chemicals reported in the US EPA's Toxic Release Inventory and that the sensitivity of this relationship (i.e. the concavity) depends importantly on the toxicity of the release. Finally, we more fully specify the political and economic factors determining toxic releases. We find that ceteris paribus, more capital-intensive counties have higher releases and that county characteristics influencing voting behavior affect release levels. |
