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Field
Intervention (Public)
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Before
The primary outcomes are environmental regulation intensity in Regions A and B, the regulation gap between regions, Region B’s share of polluting industry, and total regional pollution burden. Secondary outcomes include compliance with minimum standards, deviations below those standards, regional payoffs, and social welfare.
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After
This laboratory experiment examines how environmental governance institutions affect regulatory choices and pollution across two neighboring regions. Participants represent regional governments and simultaneously choose regulatory stringency on a 0–100 scale over 30 rounds, with fixed regional roles and anonymous random rematching each round. Five treatments are compared: a baseline without policy intervention; ecological compensation paid by Region A to Region B in proportion to B’s regulatory effort; joint assessment that deducts earnings from both regions according to their combined pollution burden; and minimum regulatory standards of 63 for Region A and 43 for Region B, enforced with either high or low fixed penalties for noncompliance. Participants receive monetary payments based on their accumulated experimental earnings.
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Field
Experimental Design (Public)
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Before
We conduct a 30-round laboratory experiment in which participants represent one of two neighboring regions and choose an environmental regulation intensity from 0 to 100. Participants are randomly assigned to fixed regional roles and one of five treatments: baseline, ecological compensation, joint environmental assessment, a minimum standard with a low penalty, or a minimum standard with a high penalty. Choices jointly determine industrial location, pollution, regulatory costs, and payoffs. We compare regulatory choices, pollution outcomes, compliance, and payoffs across treatments.
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After
We conduct a 30-round laboratory experiment in which participants represent one of two neighboring regions and choose an environmental regulation intensity from 0 to 100. Participants are randomly assigned to fixed regional roles and one of five treatments: baseline, ecological compensation, joint environmental assessment, a minimum standard with a low penalty, or a minimum standard with a high penalty. Choices jointly determine industrial location, pollution, regulatory costs, and payoffs. We compare regulatory choices, pollution outcomes, compliance, and payoffs across treatments.
Experimental hypothesis: We test four hypotheses: (1) In the baseline, Region B chooses less stringent regulation than Region A and attracts a larger share of polluting industries. (2) Ecological compensation increases regulatory stringency more strongly in Region B than in Region A, narrowing the regulatory gap and reducing Region B’s share of polluting industries. (3) Joint assessment increases average regulatory stringency and reduces total regional pollution relative to the baseline. (4) High penalties increase compliance with minimum standards and concentrate choices near the prescribed thresholds, whereas low penalties yield lower compliance and outcomes closer to the baseline.
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