Arbeitspapier
Collusion Helps Abate Environmental Pollution: A Dynamic Approach
We investigate the bearings product market collusion on the abatement of polluting emissions in a Cournot oligopoly where production entails a negative environmental externality. We model the problem as a differential game and investigate the feedback solution of two alternative settings: a fully noncooperative oligopoly and a cartel maximising the discounted profits of all firms in the industry. Our analysis proves that the output reduction entailed by collusive behaviour may have a benefiacial effect on steady state welfare, as a result of the balance between a higher market price and a lower amount of polluting emissions. This result opens a new prespective on the debate about the management of environmental externalities, which so far has mainly focussed on the design of Pigouvian taxation schemes.
- Language
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Englisch
- Bibliographic citation
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Series: Quaderni - Working Paper DSE ; No. 615
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Lambertini, Luca
Mantovani, Andrea
- Event
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Veröffentlichung
- (who)
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Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
- (where)
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Bologna
- (when)
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2007
- DOI
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doi:10.6092/unibo/amsacta/4635
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Lambertini, Luca
- Mantovani, Andrea
- Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
Time of origin
- 2007
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