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Efficiency inducing taxation for polluting oligopolists: the irrelevance of privatization

  • Denis Claude


    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Mabel Tidball


    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique)

This paper studies the optimal environmental policy in a mixed market when pollution accumulates over time. Specifically, we assume quantity competition between several private firms and one partially privatized firm. The optimal emission tax is shown to be independent of the weight the privatized firm puts on social welfare. The optimal tax rule, the accumulated stock of pollution, firms' production paths and profit streams are identical irrespective of the public firm's ownership status.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00675338.

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Date of creation: 09 Nov 2010
Date of revision:
Publication status: Published in Economics Bulletin, Economics Bulletin, 2010, pp.2946-2954
Handle: RePEc:hal:cesptp:hal-00675338
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  4. Katsoulacos, Yannis & Xepapadeas, Anastasios, 1994. "Environmental Policy Under Oligopoly with Endogenous Market Structure," CEPR Discussion Papers 955, C.E.P.R. Discussion Papers.
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  7. Requate, Till, 2005. "Environmental Policy under Imperfect Competition : A Survey," Economics Working Papers 2005,12, Christian-Albrechts-University of Kiel, Department of Economics.
  8. Karp Larry & Livernois John, 1994. "Using Automatic Tax Changes to Control Pollution Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 38-48, July.
  9. Denis, CLAUDE & Jean, HINDRIKS, 2005. "Strategic Privatization and Regulation Policy in Mixed Markets," Discussion Papers (ECON - Département des Sciences Economiques) 2005016, Université catholique de Louvain, Département des Sciences Economiques.
  10. Claude, Denis & Tidball, Mabel, 2006. "Efficiency inducing taxation for polluting oligopolists: the irrelevance of privatization," MPRA Paper 776, University Library of Munich, Germany, revised 15 Oct 2006.
  11. Sun, Qunyan & Zhang, Anming & Li, Jie, 2005. "A study of optimal state shares in mixed oligopoly: Implications for SOE reform and foreign competition," China Economic Review, Elsevier, vol. 16(1), pages 1-27.
  12. Xiangkang Yin, 2003. "Corrective Taxes under Oligopoly with Inter-Firm Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 269-277, October.
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  18. Sang-Ho Lee & Hae-Shin Hwang, 2003. "Partial Ownership For The Public Firm And Competition," The Japanese Economic Review, Japanese Economic Association, vol. 54(3), pages 324-335.
  19. Bergstrom, Theodore C. & Cross, John G. & Porter, Richard C., 1981. "Efficiency-inducing taxation for a monopolistically supplied depletable resource," Journal of Public Economics, Elsevier, vol. 15(1), pages 23-32, February.
  20. Misiolek, Walter S., 1980. "Effluent taxation in monopoly markets," Journal of Environmental Economics and Management, Elsevier, vol. 7(2), pages 103-107, June.
  21. Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
  22. Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-47, Supplemen.
  23. Joanna Poyago-Theotoky, 2001. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-5.
  24. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
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