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Title Effects of Mixed Oligopoly and Emission Taxes on the Market and Environment
Author Woohyung Lee (Keimyung Univ.) , Tohru Naito (Doshisha Univ.) and Ki-Dong Lee (Keimyung Univ.)
Volume 33 Number 2
Pages 267-294 
Keywords Emission Tax, Mixed Oligopoly, Environmental Damage, Pollution Abatement
Abstract The literature has mainly focused on the optimal emission tax rate to internalize the
negative externalities of pollutants. Thus, we investigate firms technology adoption
behavior under an emission taxation system. We also examine the possibility of using a
welfare-maximizing public firm with eco-friendly production technology to reduce
environmental damage. Private firms can choose clean or normal technology for their
production process. The analysis indicates several main results. First, under the emission
taxation system, private firms adopt clean technologies even though they bear additional
abatement costs in the production process if environmental damage caused by their
production process is large. Second, mixed oligopoly is socially desirable when
environmental damage is low. Thus, private firms take normal technology. Finally, when
private firms adopt clean technology, mixed oligopoly is better than emission taxes if
environmental damage is low and if the market is less competitive from a social welfare
File KER-20171231-33-2-03.pdf
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