Optimal emission taxation and the Porter hypothesis under Bertrand competition
ABSTRACT Is socially efficient taxation conducive to the win‐win solution associated with the strong version of the Porter Hypothesis? Using a Bertrand duopoly yielding a continuum of Nash equilibria, we show that this is true for almost any level of environmental damage and equilibrium pricing stra...
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Veröffentlicht in: | Annals of public and cooperative economics 2022-09, Vol.93 (3), p.755-765 |
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Hauptverfasser: | , |
Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | ABSTRACT
Is socially efficient taxation conducive to the win‐win solution associated with the strong version of the Porter Hypothesis? Using a Bertrand duopoly yielding a continuum of Nash equilibria, we show that this is true for almost any level of environmental damage and equilibrium pricing strategy. We also prove that the only case in which no conflict arises between private and public incentives is where firms price at marginal cost. This finding suggests that coordination between environmental and competition authorities would be highly desirable. |
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ISSN: | 1370-4788 1467-8292 |
DOI: | 10.1111/apce.12338 |