Peterson, Jeffrey M.Boisvert, Richard N.2013-03-212013-03-212013-03-21http://hdl.handle.net/2097/15397This article proposes a method to accommodate asymmetric information on farmers’ risk preferences in designing voluntary environmental policies. By incorporating stochastic efficiency rules in a mechanism design problem, the government can find incentive-compatible policies by knowing only the general class of risk preferences among farmers. The model also accounts for hidden information on technology types and input use. The method is applied empirically to simulate a pollution control program in New York. Results suggest that participation incentives would be inadequate for many risk-averse producers if the government does not account for the diversity in risk preferences.en-USThis is a pre-copy-editing, author-produced PDF of an article accepted for publication in American Journal of Agricultural Economics following peer review. The definitive publisher-authenticated version (Peterson, J. M., & Boisvert, R. N. (2004). Incentive-compatible pollution control policies under asymmetric information on both risk preferences and technology. American Journal of Agricultural Economics, 86(2), 291-306.) is available online at: http://ajae.oxfordjournals.org/content/86/2/291.fullAsymmetric informationMechanism designNonpoint pollutionRisk preferencesArticle (author version)