Technology and Antitrust Policies in a Polluting Industry

Joel Sandonis and Petr Mariel

Prague Economic Papers, 2004, vol. 2004, issue 1, 67-81

Abstract: We compare different combinations of technology and antitrust policies from a social welfare point of view in a non-tournament model of cost reducing R&D with spillovers, for the case of a homogeneous goods duopoly, where production produces pollution as a by-product, firms face an exogenous emissions tax and can also invest in abatement technologies. We show that for sufficiently polluting industries facing a loose environmental policy, cooperative R&D is not always welfare improving; a policy of subsidizing cooperative R&D is always welfare improving; allowing for mergers may be socially desirable; not regulating the industry at all may be welfare superior to a policy consisting of forbidding market collusion and subsidizing cooperative R&D.

Keywords: technology policy; antitrust; R& D cooperation; pollution (search for similar items in EconPapers)
JEL-codes: L40 L50 Q28 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (3)

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DOI: 10.18267/j.pep.232

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