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Environmental Regulation and Horizontal Mergers in the Eco-industry

Joan Canton (), Maia David and Sinclair-Desgagné, Bernard
Authors registered in the RePEc Author Service: Bernard Sinclair-Desgagné

Strategic Behavior and the Environment, 2012, vol. 2, issue 2, 107-132

Abstract: This paper considers the welfare and policy implications of a merger between environment firms (i.e., firms managing environmental resources or supplying pollution abatement goods and services). The traditional analysis of mergers in Cournot oligopolies is extended in two ways. First, we show how a pollution tax affects the incentives of environment firms to merge. Second, we stress that mergers in the eco-industry impact welfare beyond what is observed in other sectors, due to an extra effect on pollution abatement efforts. This might lead to disagreements between an anti-trust agency seeking to limit market concentration which can be detrimental to consumer surplus and a benevolent regulator who maximizes total welfare.

Keywords: Eco-industry; Horizontal mergers; Environmental policy (search for similar items in EconPapers)
JEL-codes: D62 H23 L11 (search for similar items in EconPapers)
Date: 2012
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Related works:
Working Paper: Environmental regulation and horizontal mergers in the eco-industry (2008) Downloads
Working Paper: Environmental Regulation and Horizontal Mergers in the Eco-industry (2008) Downloads
Working Paper: Environmental Regulation and Horizontal Mergers in the Eco-industry (2008) Downloads
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