Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

Using a game theoretic approach, this paper investigates necessary and sufficient conditions for siting noxious facilities efficiently in environments with not only asymmetric information but also heterogeneous players. The results show that the possibility of siting efficiently grows as the players are more homogeneous. When the players are much heterogeneous, it is difficult to design truth-telling mechanism, but siting problems are still solvable with appropriate compensation schemes. The results also show that economies of scale can play an important role in solving the siting problems.