Environmental Policy, Firm Location, And Product Differentiation: The Role of Green Preferences and Inter-firm Pollution

Arbeitspapier

Endogenous firm location is analyzed in a discrete two-region-two-firm model of product differentiation. In a non-cooperative game, two regional governments first decide on the imposition (or lifting) of domestic production standards; firms then choose technology (clean or polluting), location and price. Equilibrium quality and location structure are determined analytically. The existence of consumers willing to pay a premium on clean production methods, and the possibility of inter-firm pollution alleviate the tendency of firms to delocate into the region with the weaker regulation; then, a deregulatory race to the bottom is less likely.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Thünen-Series of Applied Economic Theory - Working Paper ; No. 06

Classification and Topics

• Classification: Wirtschaft ; State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects ; Oligopoly and Other Imperfect Markets ; Renewable Resources and Conservation: Government Policy
• Subject: environmental policy ; product differentiation ; firm location ; institutional competi-tion ; green preferences ; Umweltpolitik ; Standortwettbewerb ; Standorttheorie ; Produktdifferenzierung ; Duopol ; Spieltheorie ; Umweltbewusstsein ; Willingness to pay ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kuhn, Michael
• Event: Veröffentlichung
• (who): Universität Rostock, Institut für Volkswirtschaftslehre
• (where): Rostock
• (when): 1997

Further information

• Handle: http://hdl.handle.net/10419/78262
• Last update: 10.03.2025, 11:44 AM CET