Abstract

http://ssrn.com/abstract=1935823
 
 

References (17)



 


 



Welfare Effects of Subsidizing a Dead-End Network of Less Polluting Vehicles


Antje-Mareike Dietrich


Technische Universität Braunschweig - Institute for Economics and Business Administration

Gernot Sieg


WWU Münster

September 30, 2011

TU Braunschweig Economics Department Working Paper No. 12

Abstract:     
This article shows that in the presence of environmental externalities, it may be welfare enhancing to overcome a technological lock-in by a dead- end technology through governmental intervention. It is socially desirable to subsidize a dead-end technology if its environmental externality is small relative to the one of the established technology, if the installed base and/or the strength of the network effect is small and if future generations matter. Applying our results to the private transport sector, governments promoting alternatives to gasoline-driven vehicles have to be aware of these opposing welfare effects.

Number of Pages in PDF File: 26

Keywords: environmental externalities, network effects, private trans- port, technological change

JEL Classification: O33, L92, Q55

working papers series





Download This Paper

Date posted: October 1, 2011  

Suggested Citation

Dietrich, Antje-Mareike and Sieg, Gernot, Welfare Effects of Subsidizing a Dead-End Network of Less Polluting Vehicles (September 30, 2011). TU Braunschweig Economics Department Working Paper No. 12. Available at SSRN: http://ssrn.com/abstract=1935823 or http://dx.doi.org/10.2139/ssrn.1935823

Contact Information

Antje-Mareike Dietrich
Technical University of Braunschweig (TU Branschweig) - Institute for Economics and Business Administration ( email )
Spielmannstr. 8
Braunschweig, 38102
Germany
Gernot Sieg (Contact Author)
WWU Münster ( email )
Spielmannstr. 9
Münster, 48161
Germany
HOME PAGE: http://www.ivm-muenster.de
Feedback to SSRN


Paper statistics
Abstract Views: 210
Downloads: 9
References:  17

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.344 seconds