The Porter Hypothesis and Hyperbolic Discounting

Prabal Roy Chowdhury ()

MPRA Paper from University Library of Munich, Germany

Abstract: We examine pollution-reducing R&D by a monopoly firm producing a dirty product. In a dynamic framework with hyperbolic discounting, we establish conditions under which the Porter hypothesis goes through, i.e. environmental regulation increases R&D, thus reducing pollution, as well as increasing firm profits. This is likely to hold whenever R&D costs are at an intermediate level, and the planning horizon of the firms is large.

Keywords: Porter hypothesis; abatement tax; R&D; hyperbolic discounting (search for similar items in EconPapers)
JEL-codes: D42 D78 Q50 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-ene, nep-env, nep-ino and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The Porter hypothesis and hyperbolic discounting (2011)
Working Paper: The Porter Hypothesis and Hyperbolic Discounting (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23647

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