Cournot Competition and "Green" Innovation: An Inverted-U Relationship

Luca Lambertini (), Joanna Poyago-Theotoky and Alessandro Tampieri

Working Paper series from Rimini Centre for Economic Analysis

Abstract: We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions ("green" innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in "green" R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximize social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.

Date: 2015-06
New Economics Papers: this item is included in nep-com, nep-cse, nep-ene, nep-env, nep-ino and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Cournot competition and “green” innovation: An inverted-U relationship (2017)
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015)
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015)
Working Paper: Cournot Competition and Green Innovation: An Inverted-U Relationship (2014)
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2014)
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