Emission tax and strategic environmental corporate social responsibility in a Cournot–Bertrand comparison

Lili Xu (), Yuyan Chen and Sang-Ho Lee

MPRA Paper from University Library of Munich, Germany

Abstract: This study considers strategic relations between emission tax and environmental corporate social responsibility (ECSR) in a Cournot–Bertrand comparison, and analyzes two different timings of the games between a tax-then-ECSR (T game) and an ECSR-then-tax (E game). We show that the T game always yields higher emission tax than the E game irrespective of competition modes, but lower ECSR under Cournot while higher ECSR when the marginal damage is high under Bertrand. Additionally, compared with Bertrand, Cournot yields lower (higher) ECSR in the T (E) game, but lower emission tax in the E game while higher emission tax when the product substitutability is low in the T game. We finally show that firms always prefer Cournot competition with the commitment of E game irrespective of the product substitutability and marginal damage.

Keywords: Emission tax; environmental corporate social responsibility; Cournot–Bertrand comparison; tax-then-ECSR; ECSR-then-tax (search for similar items in EconPapers)
JEL-codes: H23 L13 M14 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-ene, nep-env, nep-gth, nep-pub and nep-res
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Journal Article: Emission tax and strategic environmental corporate social responsibility in a Cournot–Bertrand comparison (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108498

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