The switching effect of environmental taxation within Bertrand differentiated duopoly

Oliwia Kurtyka () and Philippe Mahenc

Journal of Environmental Economics and Management, 2011, vol. 62, issue 2, 267-277

Abstract: We investigate second-best optimal taxation of the polluting variety of a product in a Bertrand duopoly with differentiated varieties. The analysis provides novel insight on a useful social function of environmental regulation. Besides internalizing the environmental externality, the taxation of the polluting variety improves the matching of consumers and product varieties, and so creates a socially desirable business switching between the differentiated varieties.

Keywords: Bertrand; competition; Differentiated; products; Environmental; taxation; Green; demand; Ramsey; rule (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:62:y:2011:i:2:p:267-277

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