Cournot duopoly and environmental R&D under regulator's precommitment to an emissions tax

DOI IR Open Access

Abstract

This paper presents examination of environmental R&D of Cournot duopolists with end-of-pipe technology under a regulator's precommitment to an emissions tax. Results show that, in the presence of technological spillover effect, the government invariably prefers environmental R&D cartelization to environmental R&D competition. In addition, this paper, in stark contrast to those presenting earlier studies, reveals that consumer surplus is not necessarily maximized by environmental research joint venture (ERJV) cartelization, although there invariably exist private incentives to firms for ERJV cartelization as well as social incentives for it.

Journal

  • IDEC DP2 Series

    IDEC DP2 Series 4 (3), 1-11, 2014-06

    広島大学大学院国際協力研究科

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