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Platform intermediation to sponsor alternative fuel vehicles

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  • Dietrich, Antje-Mareike

Abstract

Many governments promote green technological innovation within the automobile sector as a means of combating climate change. Most of these innovations are driven by alternative fuels. Subsidies for buyers and governmental investment in service infrastructure are widely used. This paper investigates the question of efficient market intervention by considering the two-sided market character of the automobile market. This study shows that network effects, competitive effects triggered by an increase in automobile users, decreasing marginal utilities of additional service stations and, in the case of governmental support, environmental externalities determine the welfare-efficient extent of platform intermediation. Regarding green technologies, the results of the analysis indicate that governmental promotion of service infrastructure is reasonable, although governments should be cautious about subsidizing buyers. Intervention in favor of dirty technologies is rarely justifiable.

Suggested Citation

  • Dietrich, Antje-Mareike, 2017. "Platform intermediation to sponsor alternative fuel vehicles," Transport Policy, Elsevier, vol. 54(C), pages 90-99.
    • Handle: RePEc:eee:trapol:v:54:y:2017:i:c:p:90-99
    DOI: 10.1016/j.tranpol.2016.12.001
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    More about this item

    Keywords

    Network effects; Two-sided markets; Platform intermediation; Alternative fuel vehicles; Climate change; Regulation;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • 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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