Optimal Pollution Control in a Mixed Oligopoly with Research Spillovers

20 Pages Posted: 6 Mar 2019

See all articles by Shoji Haruna

Shoji Haruna

Okayama University

Rajeev K. Goel

Illinois State University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2019

Abstract

We study optimal pollution abatement under a mixed oligopoly when firms engage in emissions‐reducing research and development (R&D) with imperfect appropriation. The regulator uses a tax to curb emissions. Results show that in a mixed oligopoly, the public firm has positive emissions reduction in equilibrium; however, emissions reductions of the private firm could be positive or zero. Under certain conditions, the optimal pollution tax is positive; otherwise, the tax reverts to a subsidy. Comparing mixed and private duopolies, privatisation leads to reductions in R&D and output, but to an increase in overall emissions, so privatisation tends to make the environment worse.

Keywords: abatement, mixed oligopoly, pollution, R&D, spillovers, taxation

JEL Classification: D43, D62, O33, Q55

Suggested Citation

Haruna, Shoji and Goel, Rajeev K., Optimal Pollution Control in a Mixed Oligopoly with Research Spillovers (March 2019). Australian Economic Papers, Vol. 58, Issue 1, pp. 21-40, 2019. Available at SSRN: https://ssrn.com/abstract=3345253 or http://dx.doi.org/10.1111/1467-8454.12138

Shoji Haruna (Contact Author)

Okayama University ( email )

1-1-1 Tsushimanaka, Kita Ward
Okayama, 700-0082
Japan

Rajeev K. Goel

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
58
PlumX Metrics