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Collusive Allocation of Tradeable Pollution Permits

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  • Ngo Van Long
  • Antoine Soubeyran

Abstract

We show that when polluting firms are Cournot oligopolists, they may have an incentive to use the market of pollution permits as a means of indirectly coordinating their outputs. If firms are initially identical, trade in pollution permits may result in an asymmetric oligopoly. The case where firms are initially asymmetric is also considered. Nous montrons que dans une industrie oligopolistique, les firmes ont intérêt à utiliser le marché des permis de pollution comme moyen de coordonner leur taux de production. Si les firmes sont initialement identiques, le marché des permis de pollution peut créer une industrie avec des firmes asymétriques.

Suggested Citation

  • Ngo Van Long & Antoine Soubeyran, 1998. "Collusive Allocation of Tradeable Pollution Permits," CIRANO Working Papers 98s-31, CIRANO.
    • Handle: RePEc:cir:cirwor:98s-31
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    More about this item

    Keywords

    Pollution permits; asymmetric oligopoly; Permis de pollution; oligopole asymétrique;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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