IDEC DP2 Series Volume 4 Issue 3
published_at 2014-06

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

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IDEC-DP2_04-3.pdf
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.
Keywords
R&D coordination
Environmental R&D
End-of-pipe technology
Precommitment ability
Emission tax
JEL Classification Numbers: O32
JEL Classification Numbers: L13
JEL Classification Numbers: Q55
JEL Classification Numbers: Q58