Welfare Effects of Subsidizing a Dead-End Network of Less Polluting Vehicles
Overcoming a technological lock-in by means of governmental intervention may be welfare enhancing, even if the implemented technology will be replaced by a better one at a certain time in the future. This holds, if the environmental externality of the implemented technology is small relative to that of the established technology and/or if the network effect of the installed base of service stations is small. If consumers’ and politicians’ discounting of future payoffs is high, the implementation even of dead-end technologies could be sensible, but policy makers with higher preferences for future payoffs may decide not to overcome lock-in by a new green, but dead-end technology. Governments promoting alternatives to gasoline-driven vehicles must be aware of opposing welfare effects for open-ended and dead-end technologies. Copyright Springer Science+Business Media New York 2014
(This abstract was borrowed from another version of this item.)
|Date of creation:||Oct 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Universitätsstr. 14-16, 48143 Münster|
Phone: 02 51 / 83-2 29 10
Fax: 02 51 / 83-2 83 99
Web page: https://www.wiwi.uni-muenster.de/ivm/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maik Schneider & Burkhard Schade, 2003. "Innovation Process "Fuel Cell Vehicle": What Strategy Promises To Be Most Successful?," Computing in Economics and Finance 2003 166, Society for Computational Economics.
- Proost, Stef & Van Dender, Kurt, 2012. "Energy and environment challenges in the transport sector," Economics of Transportation, Elsevier, vol. 1(1), pages 77-87.
- Greaker Mads & Heggedal Tom-Reiel, 2010. "Lock-In and the Transition to Hydrogen Cars: Should Governments Intervene?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-30, May.
- Eftichios Sartzetakis & Panagiotis Tsigaris, 2005. "Environmental Externalities in the Presence of Network Effects: Adoption of Low Emission Technologies in the Automobile Market," Journal of Regulatory Economics, Springer, vol. 28(3), pages 309-326, November.
- Economides, Nicholas, 1996.
"The economics of networks,"
International Journal of Industrial Organization,
Elsevier, vol. 14(6), pages 673-699, October.
- Witt, Ulrich, 1997. ""Lock-in" vs. "critical masses" -- Industrial change under network externalities," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 753-773, October.
- Georg Hirte & Stefan Tscharaktschiew, 2012. "The optimal subsidy on electric vehicles in a metropolitan area - a SCGE study for Germany," ERSA conference papers ersa12p324, European Regional Science Association.
- Klaus Conrad, 2009. "Engines Powered by Renewable Energy, the Network of Filling Stations and Compatibility Decisions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 229(4), pages 362-381, August.
- David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May.
- Daniel Birke, 2008.
"The economics of networks - A survey of the empirical literature,"
22, Industrial Economics Division.
- Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, 09.
- Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-31, March.
- Small, Kenneth A., 2012.
"Energy policies for passenger motor vehicles,"
Transportation Research Part A: Policy and Practice,
Elsevier, vol. 46(6), pages 874-889.
- Malte Schwoon, 2006. "A Tool to Optimize the Initial Distribution of Hydrogen Filling Stations," Working Papers FNU-110, Research unit Sustainability and Global Change, Hamburg University, revised Jun 2006.
- William D. Nordhaus, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 686-702, September.
When requesting a correction, please mention this item's handle: RePEc:mut:wpaper:20. 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: (Birgit Rueschenschmidt)
If references are entirely missing, you can add them using this form.