A Note on Pollution Cleanup Investments, Signaling, Ganges River Resilience, and Lessons for Europe

Batabyal, Amitrajeet (2026): A Note on Pollution Cleanup Investments, Signaling, Ganges River Resilience, and Lessons for Europe.

Abstract

We study pollution cleanup investments, signaling, and the resilience of the Ganges river when investors differ in capability and cleanup projects differ in their ability to enhance resilience. First, we derive the minimal level of signaling necessary to sustain a separating equilibrium in which the government agency can distinguish between more and less capable investors. Larger cleanup efforts require greater signaling, although the marginal increase in signaling declines as the scale of cleanup expands. Second, we analyze the benchmark case in which signaling is impossible. Here, more and less capable investors choose the more resilience enhancing cleanup projects because the expected payment from these projects is larger than the payment from less resilience enhancing projects. Hence, eliminating signaling raises investor welfare and encourages projects that are more beneficial for the resilience of the Ganges.

• Item Type: MPRA Paper
• Language: English
• Keywords: Ganges River, Investment, Pollution Cleanup, Resilience, Signaling
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling

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