Joint ventures, pollution and environmental policy
AbstractWe examine the impact of abatement taxes on the pollution level in a duopoly framework with endogenous market structure. We demonstrate that an increase in abatement taxes could trigger a regime-switch from joint ventures to Cournot competition, causing the pollution level to increase. Moreover, abatement taxes can implement the first best outcome if and only if the industry is not too polluting. In case it is, the second best level of taxes may or may not equal the optimal tax under either joint venture, or Cournot competition.
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Bibliographic InfoPaper provided by National Institute of Public Finance and Policy in its series Working Papers with number 05/31.
Date of creation: Apr 2005
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Note: Working Paper 31, 2005
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Web page: http://www.nipfp.org.in
Joint ventures ; Pollution ; Abatement tax ; Endogenous market structure;
Find related papers by JEL classification:
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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"Environmental Policy Under Oligopoly with Endogenous Market Structure,"
CEPR Discussion Papers
955, C.E.P.R. Discussion Papers.
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