Committed and Non-committed Policy Regimes in a Sequential Mixed Hotel Duopoly

Flávio Ferreira (), Fernanda A. Ferreira () and Paula Odete Fernandes ()
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Flávio Ferreira: Polytechnic Institute of Porto
Fernanda A. Ferreira: Polytechnic Institute of Porto
Paula Odete Fernandes: Instituto Politécnico de Bragança

A chapter in Transcending Borders in Tourism Through Innovation and Cultural Heritage, 2022, pp 91-103 from Springer

Abstract: Abstract This paper highlights the effects of corporate social responsibility (CSR) on the strategic choice of pollution abatement and on the timing of the government’s commitment to the environmental tax policy, in the hotel industry. To do this, we consider a competition between one consumer-friendly hotel and one for-profit hotel, and two policy regimes (commitment and non-commitment), with two different timings of the government’s decision about environmental taxation. Hotels choose pollution abatement investments sequentially and outputs simultaneously. We show that with a high degree of consumer-friendliness, the committed environmental tax is lower than the non-committed one. We also show that although the environmental damage may be less under the non-committed policy regime, social welfare is always better under the committed policy regime. In addition, we examine the changes in the degree of CSR on the equilibrium results.

Keywords: Pollution abatement; Commitment; Environmental policy; Consumer-friendly hotel (search for similar items in EconPapers)
JEL-codes: L83 Z30 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-92491-1_5

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DOI: 10.1007/978-3-030-92491-1_5

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