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Carbon tax in a duopoly with asymmetric spillovers and symmetric contributions

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  • Wang, Chenyu
  • Atallah, Gamal

Abstract

This study constructs a polluting duopoly model characterized by asymmetric environmental research and development (R&D) spillovers with symmetric abatement technology contributions. The study investigates, in the context of environmental regulation, the effects and implications of R&D efficiencies, R&D organizations, and information-sharing schemes on this featured economy's economic and environmental equilibriums. In particular, we (i) compare R&D and profit among the regimes of R&D noncooperation, R&D cooperation, and symmetric research joint venture cartelization; (ii) evaluate the regimes' R&D, emissions, profit, and welfare; and (iii) analyze how R&D efficiencies, spillover asymmetries, and spillover magnitude affect the regimes' economic–environmental performance. Furthermore, we validate the symmetric research joint venture cartelization regarding the symmetric contributions and examine the strategic interaction of R&D among regimes. Fundamentally, this study provides practical insights into the optimal environmental technology policy mix design under a unified analysis framework for government, enterprises, and consumers.

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  • Wang, Chenyu & Atallah, Gamal, 2025. "Carbon tax in a duopoly with asymmetric spillovers and symmetric contributions," Economic Modelling, Elsevier, vol. 148(C).
    • Handle: RePEc:eee:ecmode:v:148:y:2025:i:c:s026499932500094x
    DOI: 10.1016/j.econmod.2025.107099
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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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