Arbeitspapier
Environmental quality competition and eco-labeling
A three-stage game including investments, environmental quality provision and price competition is developed to study the impact of green technology investment (ecolabeling), in a duopoly model of vertical product differentiation. The firms’ incentives to invest in green technologies depend on their relative cost structure. When firms are identical with respect to fixed costs, both firms will always invest, but if one firm is more efficient in investing, then the other firm may or may not invest depending on the level of unit cost of investment. Quality competition will be tighter when the low quality firm is more efficient, and looser when the high quality firm is more efficient in investing. Socially optimal investment for both firms is always positive, but lower than in the duopoly solution. In the absence of environmental externalities, the quality dispersion chosen by profit maximizing firms may be too high or too low, while environmental externalities increase the possibility of too low quality dispersion in the market solution. Finally, and importantly, ecolabeling can be used as a means of reducing excessive investment and increasing too low environmental quality.
- Sprache
-
Englisch
- Erschienen in
-
Series: ETLA Discussion Papers ; No. 848
- Klassifikation
-
Wirtschaft
Oligopoly and Other Imperfect Markets
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Renewable Resources and Conservation: General
- Thema
-
product differentiation
technology investment
socially optimal quality and investments
Produktdifferenzierung
Umweltzeichen
Umweltverträgliches Produkt
Duopol
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Amacher, Gregory S.
Koskela, Erkki
Ollikainen, Markku
- Ereignis
-
Veröffentlichung
- (wer)
-
The Research Institute of the Finnish Economy (ETLA)
- (wo)
-
Helsinki
- (wann)
-
2003
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Amacher, Gregory S.
- Koskela, Erkki
- Ollikainen, Markku
- The Research Institute of the Finnish Economy (ETLA)
Entstanden
- 2003
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