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The switching effect of environmental taxation within Bertrand differentiated duopoly

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  • Kurtyka, Oliwia
  • Mahenc, Philippe

Abstract

We investigate second-best optimal taxation of the polluting variety of a product in a Bertrand duopoly with differentiated varieties. The analysis provides novel insight on a useful social function of environmental regulation. Besides internalizing the environmental externality, the taxation of the polluting variety improves the matching of consumers and product varieties, and so creates a socially desirable business switching between the differentiated varieties.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 62 (2011)
Issue (Month): 2 (September)
Pages: 267-277

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Handle: RePEc:eee:jeeman:v:62:y:2011:i:2:p:267-277

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Web page: http://www.elsevier.com/locate/inca/622870

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Keywords: Bertrand competition Differentiated products Environmental taxation Green demand Ramsey rule;

References

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Cited by:
  1. Gutierrez-Hita, Carlos & Martinez-Sanchez, Francisco, 2013. "Environmental Policy to Foster a Green Differentiated Energy Market," MPRA Paper 47263, University Library of Munich, Germany.
  2. Alfred Endres & Tim Friehe, 2013. "The monopolistic polluter under environmental liability law: incentives for abatement and R&D," Social Choice and Welfare, Springer, Springer, vol. 40(3), pages 753-770, March.

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