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 InfoPaper provided by East Asian Bureau of Economic Research in its series Governance Working Papers with number 22935.
Date of creation: Jan 2009
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Emission tax; price competition; product differentiation; quantity competition; strategic managerial delegation;
Other versions of this item:
- Rupayan Pal, 2012. "Delegation And Emission Tax In A Differentiated Oligopoly," Manchester School, University of Manchester, vol. 80(6), pages 650-670, December.
- Rupayan Pal, 2009. "Delegation and emission tax in a differentiated oligopoly," Working Papers 2009-007, Madras School of Economics,Chennai,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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