Policy Diffusion in a simple Stackelberg Game

Peter Michaelis () and Thomas Ziesemer ()
Additional contact information
Peter Michaelis: University of Augsburg, Department of Economics
Thomas Ziesemer: University of Augsburg, Department of Economics

No 314, Discussion Paper Series from Universitaet Augsburg, Institute for Economics

Abstract: Strategic environmental policy games are usually based on simultaneous decision making and reach the conclusion that the policy choices are strategic substitutes. Empirical evidence, however, shows that the introduction of a regulatory instrument usually follows a consecutive pattern that is best described as policy diffusion. To introduce policy diffusion into to a strategic environmental policy game we transform the typical model setup into a Stackelberg game in which we analyze the policy decisions of two governments when one can commit to its choice. We find that the well-known trade-off between rent-seeking and the internalisation of negative externalities from pollution is mitigated when policy diffusion takes place.

Keywords: strategic environmental policy; policy diffusion; emission tax (search for similar items in EconPapers)
JEL-codes: D62 F18 Q58 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-ene and nep-env
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://opus.bibliothek.uni-augsburg.de/opus4/files/71110/314.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aug:augsbe:0314

Access Statistics for this paper

More papers in Discussion Paper Series from Universitaet Augsburg, Institute for Economics Universitaetsstrasse 16, D-86159 Augsburg, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Simone Raab-Kratzmeier ().