IDEAS home Printed from
   My bibliography  Save this article

Auctioning green investment grants as a means of accelerating environmental innovation


  • Cesare Dosi
  • Michèle Moretto


[eng] Besicles uncertainty about on-going private benefits, voluntary abandonment of a polluting technology may be (further) delayed if switching costs are expected to decline over time, because of positive extemalities stemming from the diffusion of the new (« green ») production process. In this paper we examine the implications of these sources of inertia on the design of investment grants aimed at accelerating environmental innovation. We show that although « network externalities » tend to decelerate spontaneous (decentralized) technological change, they provide the regulator with the opportunity of saving public funds, by targeting grants to agent(s) with lower switching costs, instead of subsidizing the entire industry indiscriminately. [fre] Outre les incertitudes relatives aux bénéfices privés, l'abandon volontaire d'une technologie polluante peut être ultérieurement retardé par la perspective d'une réduction des coûts d'investissement liée à la diffusion du nouveau mode de production. Dans cet article, seront analysées les implications de ces sources d'inertie sur la conception d'aides publiques à l'investissement ayant pour but d'accélérer l'adoption de technologies vertes. Bien que la perspective d'une réduction des coûts d'investissement tende à ralentir le changement technologique spontané, il sera montré que l'existence d'effets externes positifs, liés à la diffusion du nouveau mode de production, offre au régulateur la possibilité de réduire les dépenses publiques en octroyant les subventions aux entreprises ayant des coûts inférieurs d'innovation, au lieu de subventionner, sans discrimination, tout le secteur concerné.

Suggested Citation

  • Cesare Dosi & Michèle Moretto, 1998. "Auctioning green investment grants as a means of accelerating environmental innovation," Revue d'Économie Industrielle, Programme National Persée, vol. 83(1), pages 99-110.
  • Handle: RePEc:prs:recind:rei_0154-3229_1998_num_83_1_1702
    Note: DOI:10.3406/rei.1998.1702

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Cesare Dosi & Michele Moretto, 2010. "Environmental Innovation, War Of Attrition And Investment Grants," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 37-59.
    2. Moretto, Michele, 2008. "Competition and irreversible investments under uncertainty," Information Economics and Policy, Elsevier, vol. 20(1), pages 75-88, March.
    3. Moretto, Michele, 2000. "Irreversible investment with uncertainty and strategic behavior," Economic Modelling, Elsevier, vol. 17(4), pages 589-617, December.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prs:recind:rei_0154-3229_1998_num_83_1_1702. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Equipe PERSEE). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.