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http://dx.doi.org/10.15266/KEREA.2016.25.3.351

Emission Tax, Environment and Welfare in Mixed Duopoly Markets: Comparing Quantity and Price Competitions  

Lee, Sangho (Department of Economics, Chonnam National University)
Cho, Sumi (The Center for Regional Development, Chonnam National University)
Xu, Lili (Department of Economics and Trade, Dalian Maritime University)
Publication Information
Environmental and Resource Economics Review / v.25, no.3, 2016 , pp. 351-376 More about this Journal
Abstract
This study examines optimal emission taxes and welfares in mixed duopoly markets where public and private firms produce differentiated goods and emit pollutions. Both comparing quantity and price competitions and comparing simultaneous and simultaneous games provides the followings findings: First, irrespective of competition modes between quantity and price competitions or simultaneous and sequential games, the optimal emission tax is always lower than marginal environmental damage. Second, emission tax under private leadership is the highest in quantity competition while that under public leadership is the highest in price competition. Third, environmental damage under Cournot and private leadership is worsened in quantity competition while that under public leadership is worsened in price competition. Finally, welfare under Bertrand and public leadership is improved in price competition while that under private leadership is improved in quantity competition.
Keywords
Emission Tax; Product Differentiation; Mixed Duopoly; Quantity Competition; Price Competition;
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