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A Dynamic Oligopoly with International Trade and the Environment: An Evolutionary Approach

Author

Listed:
  • Domenico Buccella

    (Kozminski University, Department of Economics)

  • Luciano Fanti

    (University of Pisa, Department of Economics and Management)

  • Luca Gori

    (University of Pisa, Department of Law)

  • Mauro Sodini

    (University of Naples “Federico II”, Department of Law
    Technical University of Ostrava, Department of Finance, Faculty of Economics)

Abstract

This article examines a dynamic oligopoly model in which firms choose between dirty and green technologies under international trade. We begin by analysing the static problem of Nash equilibrium in an oligopolistic industry where goods are sold both domestically and abroad. Using an evolutionary approach, we then study the resulting dynamic system, focusing on the emergence of different long-term scenarios shaped by technological characteristics and the parameters of environmental and trade policies. Our findings demonstrate how environmental taxes and import tariffs strategically influence the transition to green technologies.

Suggested Citation

  • Domenico Buccella & Luciano Fanti & Luca Gori & Mauro Sodini, 2025. "A Dynamic Oligopoly with International Trade and the Environment: An Evolutionary Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(11), pages 3029-3057, November.
    • Handle: RePEc:kap:enreec:v:88:y:2025:i:11:d:10.1007_s10640-025-01017-6
    DOI: 10.1007/s10640-025-01017-6
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    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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