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Environmental awareness and environmental R&D spillovers in differentiated duopoly

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  • Yakita, Akira
  • Yamauchi, Hisayuki

Abstract

Assuming horizontal product differentiation and environmental R&D spillovers in duopoly, we analyze the welfare effects of R&D strategies of firms in symmetric equilibrium. When the degree of product differentiation is sufficiently great, firms benefit from technological spillovers by cooperative environmental R&D, appealing to environmentally aware individuals, thereby leading to higher social welfare. Conversely, when product differentiation is relatively small, firms avoid negative effects of R&D spillovers on the profits by lowering the environmental quality of products cooperatively, thereby resulting in smaller output and lower social welfare. However, firms always have the incentives for cooperating in environmental R&D activities.

Suggested Citation

  • Yakita, Akira & Yamauchi, Hisayuki, 2011. "Environmental awareness and environmental R&D spillovers in differentiated duopoly," Research in Economics, Elsevier, vol. 65(3), pages 137-143, September.
  • Handle: RePEc:eee:reecon:v:65:y:2011:i:3:p:137-143
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    References listed on IDEAS

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    1. Akira Yakita, 2009. "Technology Choice And Environmental Awareness In A Trade And Environment Context," Australian Economic Papers, Wiley Blackwell, vol. 48(3), pages 270-279, September.
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    4. Symeonidis, George, 2003. "Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D," International Journal of Industrial Organization, Elsevier, vol. 21(1), pages 39-55, January.
    5. Eriksson, Clas, 2004. "Can green consumerism replace environmental regulation?--a differentiated-products example," Resource and Energy Economics, Elsevier, vol. 26(3), pages 281-293, September.
    6. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    7. Symeonidis, George, 1999. "Cartel stability in advertising-intensive and R&D-intensive industries," Economics Letters, Elsevier, vol. 62(1), pages 121-129, January.
    8. Kabiraj, Tarun, 2007. "On the incentives for cooperative research," Research in Economics, Elsevier, vol. 61(1), pages 17-23, March.
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    Citations

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    Cited by:

    1. Smirnova, Janna, 2015. "Environmental awareness of nations: the interplay with institutional transformation," MPRA Paper 65857, University Library of Munich, Germany.
    2. Hsu, Chu-Chuan & Lee, Jen-Yao & Wang, Leonard F.S., 2017. "Consumers awareness and environmental policy in differentiated mixed oligopoly," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 444-454.
    3. Ouchida, Yasunori & Goto, Daisaku, 2016. "Environmental research joint ventures and time-consistent emission tax: Endogenous choice of R&D formation," Economic Modelling, Elsevier, vol. 55(C), pages 179-188.
    4. Gori, Giuseppe Francesco & Lambertini, Luca, 2013. "Trade liberalisation between asymmetric countries with environmentally concerned consumers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 549-560.
    5. Yasunori Ouchida & Daisaku Goto, 2012. "What is the socially desirable formation of environmental R&D?," IDEC DP2 Series 2-6, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
    6. Yasunori Ouchida & Daisaku Goto, 2014. "Environmental Research Joint Ventures and Time-Consistent Emission Tax," Working Papers 2014.35, Fondazione Eni Enrico Mattei.
    7. Lisa Jacobson & Jonas Åkerman & Matteo Giusti & Avit K. Bhowmik, 2020. "Tipping to Staying on the Ground: Internalized Knowledge of Climate Change Crucial for Transformed Air Travel Behavior," Sustainability, MDPI, Open Access Journal, vol. 12(5), pages 1-18, March.
    8. Zhang, Linghong & Wang, Jingguo & You, Jianxin, 2015. "Consumer environmental awareness and channel coordination with two substitutable products," European Journal of Operational Research, Elsevier, vol. 241(1), pages 63-73.
    9. Chang Su & Xiaojing Liu & Wenyi Du, 2020. "Green Supply Chain Decisions Considering Consumers’ Low-Carbon Awareness under Different Government Subsidies," Sustainability, MDPI, Open Access Journal, vol. 12(6), pages 1-12, March.
    10. Luis Gautier, 2017. "Local content and emission taxes when the number of foreign firms is endogenous," Journal of Economics, Springer, vol. 122(3), pages 239-266, November.
    11. Ouchida, Yasunori & Goto, Daisaku, 2014. "Do emission subsidies reduce emission? In the context of environmental R&D organization," Economic Modelling, Elsevier, vol. 36(C), pages 511-516.
    12. Lian, Xubei & Gong, Qiang & Wang, Leonard F.S., 2018. "Consumer awareness and ex-ante versus ex-post environmental policies revisited," International Review of Economics & Finance, Elsevier, vol. 55(C), pages 68-77.

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