Delegation And Emission Tax In A Differentiated Oligopoly
AbstractThis paper examines how product differentiation as well as strategic managerial delegation affects optimal emission tax rate, environmental damage and social welfare, under alternative modes of product market competition. It shows that, under pure profit maximization, the (positive) optimal emission tax rate is not necessarily decreasing in degree of product differentiation, irrespective of the mode of competition. The possibility of emission tax rate to be positive and lower for more differentiated products, under quantity (price) competition, is higher (lower) in case of delegation than that in case of no delegation. It also shows that, under quantity (price) competition, the equilibrium emission tax rate, environmental damage and social welfare are higher (lower) in case of delegation than that in case of no delegation.
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Bibliographic InfoArticle provided by University of Manchester in its journal The Manchester School.
Volume (Year): 80 (2012)
Issue (Month): 6 (December)
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Other versions of this item:
- Rupayan Pal, 2009. "Delegation and Emission Tax in a Differentiated Oligopoly," Governance Working Papers 22935, East Asian Bureau of Economic Research.
- Rupayan Pal, 2009. "Delegation and emission tax in a differentiated oligopoly," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2009-007, Indira Gandhi Institute of Development Research, Mumbai, India.
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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