Welfare effects of subsidizing a dead-end network of less polluting vehicles
AbstractThis article shows that in the presence of environmental externalities, it may be welfare enhancing to overcome a technological lock-in by a deadend technology through governmental intervention. It is socially desirable to subsidize a dead-end technology if its environmental externality is small relative to the one of the established technology, if the installed base and/or the strength of the network effect is small and if future generations matter. Applying our results to the private transport sector, governments promoting alternatives to gasoline-driven vehicles have to be aware of these opposing welfare effects. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Technische Universität Braunschweig, Economics Department in its series Economics Department Working Paper Series with number 12.
Date of creation: 2011
Date of revision:
environmental externalities; network effects; private transport; technological change;
Other versions of this item:
- Dietrich, Antje-Mareike & Sieg, Gernot, 2011. "Welfare effects of subsidizing a dead-end network of less polluting vehicles," MPRA Paper 33780, University Library of Munich, Germany.
- Antje-Mareike Dietrich & Gernot Sieg, 2013. "Welfare Effects of Subsidizing a Dead-End Network of Less Polluting Vehicles," Working Papers 20, Institute of Transport Economics, University of Muenster.
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-21 (All new papers)
- NEP-CWA-2011-11-21 (Central & Western Asia)
- NEP-ENE-2011-11-21 (Energy Economics)
- NEP-ENV-2011-11-21 (Environmental Economics)
- NEP-NET-2011-11-21 (Network Economics)
- NEP-REG-2011-11-21 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eftichios Sartzetakis & Panagiotis Tsigaris, 2005. "Environmental Externalities in the Presence of Network Effects: Adoption of Low Emission Technologies in the Automobile Market," Journal of Regulatory Economics, Springer, vol. 28(3), pages 309-326, November.
- Witt, Ulrich, 1997. ""Lock-in" vs. "critical masses" -- Industrial change under network externalities," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 753-773, October.
- Nicholas Economides, 1995.
"The Economics of Networks,"
94-24, New York University, Leonard N. Stern School of Business, Department of Economics, revised Sep 1995.
- Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
- Economides, Nicholas, 1996. "The economics of networks," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 673-699, October.
- Greaker Mads & Heggedal Tom-Reiel, 2010. "Lock-In and the Transition to Hydrogen Cars: Should Governments Intervene?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-30, May.
- Malte Schwoon, 2006. "A Tool to Optimize the Initial Distribution of Hydrogen Filling Stations," Working Papers FNU-110, Research unit Sustainability and Global Change, Hamburg University, revised Jun 2006.
- Daniel Birke, 2008.
"The economics of networks - A survey of the empirical literature,"
22, Industrial Economics Division.
- Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, 09.
- David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.