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Competition among Coalitions in a Cournot Industry: A Validation of the Porter Hypothesis

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  • L. Lambertini
  • G. Piagnataro
  • A. Tampieri

Abstract

We determine the emergence of the Porter Hypothesis in a large oligopoly setting where the industry-wide adoption of green technologies is endogenously determined as a result of competition among coalitions. We examine a setting where the initial technology is polluting, firms decide whether to be brown or green and compete in quantities. We find that the Porter hypothesis may emerge as a market configuration with all green firms spurred by environmental regulation, even if consumers are not environmentally concerned. Finally, we single out the necessary and sufficient conditions under which the green grand coalition is socially optimal and therefore yields a win-win outcome.

Suggested Citation

  • L. Lambertini & G. Piagnataro & A. Tampieri, 2015. "Competition among Coalitions in a Cournot Industry: A Validation of the Porter Hypothesis," Working Papers wp989, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:wp989
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    1. Kopel, Michael & Lamantia, Fabio, 2018. "The persistence of social strategies under increasing competitive pressure," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 71-83.

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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