IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Welfare effects of subsidizing a dead-end network of less polluting vehicles

  • Dietrich, Antje-Mareike
  • Sieg, Gernot

This article shows that in the presence of environmental externalities, it may be welfare enhancing to overcome a technological lock-in by a deadend technology through governmental intervention. It is socially desirable to subsidize a dead-end technology if its environmental externality is small relative to the one of the established technology, if the installed base and/or the strength of the network effect is small and if future generations matter. Applying our results to the private transport sector, governments promoting alternatives to gasoline-driven vehicles have to be aware of these opposing welfare effects.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://econstor.eu/bitstream/10419/51319/1/671174509.pdf
Download Restriction: no

Paper provided by Technische Universit├Ąt Braunschweig, Economics Department in its series Economics Department Working Paper Series with number 12.

as
in new window

Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:zbw:tbswps:12
Contact details of provider: Postal: Pockelsstr. 14, D-38106 Braunschweig
Web page: https://www.tu-braunschweig.de/vwl

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Daniel Birke, 2008. "The economics of networks - A survey of the empirical literature," Occasional Papers 22, Industrial Economics Division.
  2. 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.
  3. 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.
  4. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May.
  5. 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.
  6. Nicholas Economides, 1997. "The Economics of Networks," Industrial Organization 9701002, EconWPA.
  7. 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.
  8. 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.
  9. Proost, Stef & Van Dender, Kurt, 2012. "Energy and environment challenges in the transport sector," Economics of Transportation, Elsevier, vol. 1(1), pages 77-87.
  10. 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.
  11. Small, Kenneth A., 2012. "Energy policies for passenger motor vehicles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 874-889.
  12. 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.
  13. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:tbswps:12. 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: (ZBW - German National Library of Economics)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.