Strategic Environmental Policy, International Trade and Self-enforcing Agreements: The Role of Consumers' Taste for Variety
Michael Finus () and
Alaa Al Khourdajie ()
Strategic Behavior and the Environment, 2018, vol. 7, issue 3-4, 317-350
We study the coordination of environmental policy within an agreement in the context of international trade. In an n-country intra-industry trade model, firms produce a horizontally differentiated good and consumers have a taste for variety. Governments choose strategically an emission tax and their membership in an international agreement. We show that only a strong taste for variety reduces the competition among governments sufficiently enough to allow for some form of policy coordination, though full cooperation will never be obtained.
Keywords: Strategic environmental policy; International trade; Self-enforcing international agreements; Horizontal product differentiation; Taste for variety (search for similar items in EconPapers)
JEL-codes: C72 F18 Q58 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Working Paper: Strategic Environmental Policy, International Trade and Self-enforcing Agreements: The Role of Consumers' Taste for Variety (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:now:jnlsbe:102.00000086
Access Statistics for this article
More articles in Strategic Behavior and the Environment from now publishers
Bibliographic data for series maintained by Alet Heezemans ().