Spatial aspects of pollution control when pollutants have synergistic effects: Evidence from a differential game with asymmetric information

An asymmetric information differential game is utilized to explore the norm ative issue: should environmental regulations be carried out locally or cen trally? Modeling localities as having superior information, or more lenienc y to adopt new environmental regulations, results from simulations indicate that local control Pareto dominates central control when enough synergism occurs between pollutants. In contrast to predictions made by those respons ible for framing US environmental policy in the 1960s, these findings sugge st an expanded future role for local governments in providing environmental protection, particularly in light of Tiebout's (1956) analysis of consumer s who "vote with their feet" for their preferred basket of public services. "Practically all the things we've done in the federal government are like t hings Al Smith did as governor in New York." -Franklin Roosevelt (Schlesing er, 1960, p.520).