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Environmental policies in a differentiated oligopoly revisited

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  • Fujiwara, Kenji

Abstract

Constructing a model of polluting oligopoly with product differentiation, we consider how product differentiation, together with the presence and absence of free entry, affects optimal pollution tax/subsidy policies. The sign of the short- and long-run optimal pollution taxes are highly sensitive to the parameter measuring product differentiation as well as the presence of free entry. How they are affected by a change in product differentiation, which is not addressed in the existing literature, is also made clear.

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Bibliographic Info

Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 31 (2009)
Issue (Month): 3 (August)
Pages: 239-247

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Handle: RePEc:eee:resene:v:31:y:2009:i:3:p:239-247

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Web page: http://www.elsevier.com/locate/inca/505569

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Keywords: Environmental policy Oligopoly Product differentiation Free entry and exit;

References

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  1. Sajal Lahiri & Yoshiyasu Ono, 2007. "Relative Emission Standard versus Tax under Oligopoly: The Role of Free Entry," Journal of Economics, Springer, vol. 91(2), pages 107-128, June.
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  6. Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, vol. 43(2), pages 217-35, June.
  7. R. Simpson, 1995. "Optimal pollution taxation in a Cournot duopoly," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 6(4), pages 359-369, December.
  8. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  9. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-FranÁois Thisse, 2002. "Agglomeration and Trade Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 409-436, May.
  10. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  11. José Moraga-González & Noemi Padrón-Fumero, 2002. "Environmental Policy in a Green Market," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(3), pages 419-447, July.
  12. Toshimitsu, Tsuyoshi, 2008. "Effect of a tariff on the environment and welfare: The case of an environmental differentiated duopoly in a Green Market," Japan and the World Economy, Elsevier, vol. 20(1), pages 114-128, January.
  13. Suzumura, Kotaro & Kiyono, Kazuharu, 1987. "Entry Barriers and Economic Welfare," Review of Economic Studies, Wiley Blackwell, vol. 54(1), pages 157-67, January.
  14. J. Peter Neary, 2000. "International Trade and the Environment - Theoretical and Policy Linkages," Working Papers 200018, School Of Economics, University College Dublin.
  15. Sajal Lahiri & George Symeonidis, 2007. "Piecemeal Multilateral Environmental Policy Reforms under Asymmetric Oligopoly," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(5), pages 885-899, October.
  16. Cellini, Roberto & Lambertini, Luca & Ottaviano, Gianmarco I. P., 2004. "Welfare in a differentiated oligopoly with free entry: a cautionary note," Research in Economics, Elsevier, vol. 58(2), pages 125-133, June.
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Citations

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Cited by:
  1. Ouchida, Yasunori & Goto, Daisaku, 2014. "Do emission subsidies reduce emission? In the context of environmental R&D organization," Economic Modelling, Elsevier, vol. 36(C), pages 511-516.
  2. D. Dragone & L. Lambertini & A. Palestini & A. Tampieri, 2012. "On the Optimal Number of Firms in the Commons: Cournot vs Bertrand," Working Papers wp856, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. Maia David & Alain-Désiré Nimubona & Bernard Sinclair-Desgagné, 2011. "Emission taxes and the market for abatement goods and services," Working Papers 46682, Institut National de la Recherche Agronomique, France.
  4. Rupayan Pal & Bibhas Saha, 2010. "Does partial privatization improve the environment?," Microeconomics Working Papers 23021, East Asian Bureau of Economic Research.
  5. Bárcena-Ruiz, Juan Carlos & Campo, María Luz, 2012. "Partial cross-ownership and strategic environmental policy," Resource and Energy Economics, Elsevier, vol. 34(2), pages 198-210.
  6. Luis Gautier, 2013. "Multilateral and unilateral policy reform of emission taxes and abatement subsidies in a two-country model with oligopolistic interdependence," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(1), pages 59-71, January.
  7. 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.
  8. Rupayan Pal, 2009. "Delegation and Emission Tax in a Differentiated Oligopoly," Working Papers id:2263, eSocialSciences.
  9. Karanfil, Fatih, 2010. "Environmental regulation in the presence of unrecorded economy," GIAM Working Papers 10-2, Galatasaray University Economic Research Center, revised 2010.
  10. Rupayan Pal & Bibhas Saha, 2010. "Does Partial Privatization Improve the Environment?," Working Papers id:3122, eSocialSciences.
  11. Rupayan Pal & Bibhas Saha, 2011. "Environmental outcomes in a model of mixed duopoly," University of East Anglia Applied and Financial Economics Working Paper Series 030, School of Economics, University of East Anglia, Norwich, UK..

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