Journal article
Strategic Emission Fees: Using Green Technology to Deter Entry
Journal of industry, competition and trade, Vol.19(2), pp.313-349
06/01/2019
Abstract
We consider a sequential-move game in which a polluting monopolist chooses whether to acquire a green technology, and a potential entrant responds deciding whether to join the market and, upon entry, whether to invest in clean technology. Our paper compares two models: one in which environmental regulation is strategically set before firms' decisions; and another where regulation is selected after firms' entry and investment decisions. We show that a proactive regulation that strategically anticipates firms' behavior can implement different market structures. In particular, policy makers can choose emission fees to induce competition and/or investment in clean technology, giving rise to market structures that maximize social welfare.
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Details
- Title
- Strategic Emission Fees: Using Green Technology to Deter Entry
- Creators
- Ana Espinola-Arredondo - Washington State UniversityFelix Munoz-Garcia - Washington State UniversityBoying Liu - Washington State University
- Publication Details
- Journal of industry, competition and trade, Vol.19(2), pp.313-349
- Academic Unit
- Economic Sciences, School of
- Publisher
- Springer Nature
- Number of pages
- 37
- Identifiers
- 99900971341201842
- Language
- English
- Resource Type
- Journal article