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Efficiency inducing taxation for polluting oligopolists: the irrelevance of privatization

Author

Listed:
  • Denis Claude

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

  • Mabel Tidball

    () (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

Abstract

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.

Suggested Citation

  • Denis Claude & Mabel Tidball, 2010. "Efficiency inducing taxation for polluting oligopolists: the irrelevance of privatization," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00675338, HAL.
  • Handle: RePEc:hal:cesptp:hal-00675338
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00675338
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    References listed on IDEAS

    as
    1. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, vol. 70(5), pages 1037-1041, December.
    2. J Hindriks & D Claude, 2006. "Strategic Privatization and Regulation Policy in Mixed Markets," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(1), pages 7-26, February.
    3. Denis Claude & Mabel Tidball, 2010. "Efficiency inducing taxation for polluting oligopolists: the irrelevance of privatization," Economics Bulletin, AccessEcon, vol. 30(4), pages 2946-2954.
    4. Requate, Till, 2005. "Environmental Policy under Imperfect Competition: A Survey," Economics Working Papers 2005-12, Christian-Albrechts-University of Kiel, Department of Economics.
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    Cited by:

    1. Denis Claude & Mabel Tidball, 2010. "Efficiency inducing taxation for polluting oligopolists: the irrelevance of privatization," Economics Bulletin, AccessEcon, vol. 30(4), pages 2946-2954.

    More about this item

    Keywords

    mixed duopoly; privatization; irrelevance theorem; tax; differential game; mixed market; partial privatization;

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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