The structure of farming activity under the provisions of the generalized regime of the Common Agricultural Policy involving both the first and second pillar elements is modeled.
The paper discusses the design of optimal regulatory policies under an alternative analytical framework of unbounded and bounded rationality, by considering the mechanism that provides the type of the optimal CAP instruments that ensure the collective attainment of a social environmental target, along with the type of interdependence characterizing them
Farming activity is modeled under an intervention policy regime, combining the environmental requirements of the Council Nitrates Directive and the compensatory provisions of the second pillar of the Common Agricultural Policy
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