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Environmental Technology Transfer in a Cournot Duopoly: The Case of Fixed-Fee Licensing

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  • Akira Miyaoka

    (Graduate School of Economics, Osaka University)

Abstract

This study considers a Cournot duopoly market in which a clean firm can transfer its less polluting technology to a dirty firm through a fixed-fee licensing contract. We analyze the impacts of emissions taxes on the incentives of firms to transfer technology as well as on the total pollution level, and examine the properties of the optimal emissions tax policy. We first show that higher emissions taxes weaken incentives for technology transfer and that this can lead to a perverse increase in the level of total pollution. We then compare the optimal emissions tax when technology licensing is possible with that when licensing is infeasible and show that the relationship between the optimal tax rate and the degree of the initial technology gap between firms when licensing is possible can be the opposite of that when licensing is infeasible.

Suggested Citation

  • Akira Miyaoka, 2014. "Environmental Technology Transfer in a Cournot Duopoly: The Case of Fixed-Fee Licensing," Discussion Papers in Economics and Business 14-08, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1408
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    References listed on IDEAS

    as
    1. Morton I. Kamien & Yair Tauman, 1986. "Fees Versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 471-491.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Technology transfer; Cournot duopoly; Pollution; Emissions tax;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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