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The switching effect of environmental taxation within Bertrand differentiated duopoly

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  • Kurtyka, Oliwia
  • Mahenc, Philippe

Abstract

We investigate second-best optimal taxation of the polluting variety of a product in a Bertrand duopoly with differentiated varieties. The analysis provides novel insight on a useful social function of environmental regulation. Besides internalizing the environmental externality, the taxation of the polluting variety improves the matching of consumers and product varieties, and so creates a socially desirable business switching between the differentiated varieties.

Suggested Citation

  • Kurtyka, Oliwia & Mahenc, Philippe, 2011. "The switching effect of environmental taxation within Bertrand differentiated duopoly," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 267-277, September.
  • Handle: RePEc:eee:jeeman:v:62:y:2011:i:2:p:267-277
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gutierrez-Hita, Carlos & Martinez-Sanchez, Francisco, 2013. "Environmental Policy to Foster a Green Differentiated Energy Market," MPRA Paper 47263, University Library of Munich, Germany.
    2. Vetter Henrik, 2014. "Environmental Taxes in Duopoly with Soft Capacity Constraints," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(4), pages 1-16, October.
    3. Maria Chistyakova & Philippe Mahenc, 2015. "Free-Riding on Environmental Taxation," CEEES Paper Series CE3S-02/15, European University at St. Petersburg, Department of Economics.
    4. repec:spr:envpol:v:20:y:2018:i:2:d:10.1007_s10018-017-0197-2 is not listed on IDEAS
    5. repec:eee:resene:v:50:y:2017:i:c:p:36-50 is not listed on IDEAS
    6. repec:kap:regeco:v:52:y:2017:i:3:d:10.1007_s11149-017-9339-5 is not listed on IDEAS
    7. Paolo GARELLA & Maria Teresa TRENTINAGLIA DE DAVERIO, 2015. "Carbon Tax, Emission Permits, and Carbon Leak under Price Competition," Departmental Working Papers 2015-06, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    8. Alfred Endres & Tim Friehe, 2013. "The monopolistic polluter under environmental liability law: incentives for abatement and R&D," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 753-770, March.

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