Vertical differentiation in a Cournot industry: The Porter hypothesis and beyond

Luca Lambertini () and Alessandro Tampieri

Resource and Energy Economics, 2012, vol. 34, issue 3, 374-380

Abstract: We modify the vertically differentiated duopoly model by André et al. (2009) replacing Bertrand with Cournot behaviour, and we characterise the region wherein a Porter-type result takes place. We show that the Porter hypothesis applies in an equilibrium taking always the form of a prisoner's dilemma. Moreover, whenever the asymmetry in the cost parameters between green and brown technology is not too high, a class of equilibria emerges wherein firms converge spontaneously onto the green standard as a result of dominant strategies, any environmental regulation being altogether absent.

Keywords: Environmental quality; Quantity competition; Green technology; Porter hypothesis (search for similar items in EconPapers)
JEL-codes: L13 L51 Q55 Q58 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Working Paper: Vertical Differentiation in a Cournot Industry: The Porter Hypothesis and Beyond (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:34:y:2012:i:3:p:374-380

DOI: 10.1016/j.reseneeco.2012.03.001

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