Collusive Allocation of Tradeable Pollution Permits

Ngo Long and Antoine Soubeyran

CIRANO Working Papers from CIRANO

Abstract: We show that when polluting firms are Cournot oligopolists, they may have an incentive to use the market of pollution permits as a means of indirectly coordinating their outputs. If firms are initially identical, trade in pollution permits may result in an asymmetric oligopoly. The case where firms are initially asymmetric is also considered. Nous montrons que dans une industrie oligopolistique, les firmes ont intérêt à utiliser le marché des permis de pollution comme moyen de coordonner leur taux de production. Si les firmes sont initialement identiques, le marché des permis de pollution peut créer une industrie avec des firmes asymétriques.

Keywords: Pollution permits; asymmetric oligopoly; Permis de pollution; oligopole asymétrique (search for similar items in EconPapers)
JEL-codes: L13 Q20 (search for similar items in EconPapers)
Date: 1998-10-01
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:98s-31

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