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Pollution, Factor Ownerships, and Emission Taxes

Author

Listed:
  • Chorng-Jian Liu

    ()

  • Chao-Cheng Mai

    ()

  • Fu-Chuan Lai

    ()

  • Wen-Chung Guo

    ()

Abstract

This paper employs Cournot’s ( 1838 ) model of complementary goods to analyze the optimal emission taxation under joint and independent ownership with pollution. When the marginal damage is small (large), an emission taxation is unnecessary (necessary), because the quantity (environmental) distortion is more serious than the environmental (quantity) distortion. This finding has never been presented in the literature. In contrast to Cournot ( 1838 ), a striking result is that independent ownership may be welfare superior to joint ownership when the marginal damage of externality is large in the absence of governmental intervention. Copyright International Atlantic Economic Society 2010

Suggested Citation

  • Chorng-Jian Liu & Chao-Cheng Mai & Fu-Chuan Lai & Wen-Chung Guo, 2010. "Pollution, Factor Ownerships, and Emission Taxes," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(2), pages 209-216, June.
  • Handle: RePEc:kap:atlecj:v:38:y:2010:i:2:p:209-216 DOI: 10.1007/s11293-010-9213-7
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    References listed on IDEAS

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    1. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, vol. 70(5), pages 1037-1041, December.
    2. Martin, Robert E., 1986. "Externality regulation and the monopoly firm," Journal of Public Economics, Elsevier, vol. 29(3), pages 347-362, April.
    3. Baumol, William J, 1972. "On Taxation and the Control of Externalities," American Economic Review, American Economic Association, vol. 62(3), pages 307-322, June.
    4. Jan K. Brueckner, 2004. "Network Structure and Airline Scheduling," Journal of Industrial Economics, Wiley Blackwell, vol. 52(2), pages 291-312, June.
    5. Rajeev Goel & Edward Hsieh, 1997. "Market structure, pigouvian taxation, and welfare," Atlantic Economic Journal, Springer;International Atlantic Economic Society, pages 128-138.
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    Cited by:

    1. Wen-Chung Guo & Fu-Chuan Lai & Chorng-Jian Liu & Chao-Cheng Mai, 2012. "Symbiotic Production and Downstream Market Competition," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 40(3), pages 329-340, September.

    More about this item

    Keywords

    Emission taxation; Joint ownership; Independent ownership; Pollution; H23; L10;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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