Journal article
Green Alliances: Are They Beneficial when Regulated Firms are Asymmetric?
Journal of industry, competition and trade, Vol.22(2), pp.145-178
06/01/2022
Handle:
https://hdl.handle.net/2376/123324
Abstract
In this paper, we analyze the collaboration between an environmental group (EG) and polluting firms when they are asymmetric in their abatement costs. We find that, as firms become more asymmetric, the EG collaborates more with the firm suffering from an abatement cost disadvantage, but this additional collaboration does not overcome firms’ cost asymmetry, producing an overall decrease in total abatement and an increase in total emissions. We also evaluate the welfare effects of introducing an EG and/or a regulator, finding that the latter generally yields larger welfare gains than the former when neither are present. Unlike previous studies, we show that the welfare benefit from a second agent is, under most settings, largest when firms are more asymmetric in their abatement costs.
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Details
- Title
- Green Alliances
- Creators
- John C. Strandholm - University of South Carolina UpstateAna Espinola-Arredondo - Washington State UniversityFelix Munoz-Garcia - Washington State University
- Publication Details
- Journal of industry, competition and trade, Vol.22(2), pp.145-178
- Academic Unit
- Economic Sciences, School of
- Publisher
- Springer US
- Grant note
- University of South Carolina Upstate Office of Sponsored Awards and Research Support
- Identifiers
- 99900971340601842
- Language
- English
- Resource Type
- Journal article