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Endogenous timing in private and mixed duopolies with emission taxes

Sang-Ho Lee () and Lili Xu

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines an endogenous timing game in product differentiated duopolies under price competition when emission tax is imposed on environmental externality. We show that a simultaneous-move (sequential-move) outcome can be an equilibrium outcome in a private duopoly under significant (insignificant) environmental externality, but this result can be reversed in a mixed duopoly. We also show that when environmental externalities are significant, public leadership yields greater welfare than private leadership, and that public leadership is more robust than private leadership as an equilibrium outcome. Finally, we find that privatization can result in a public leader becoming a private leader, but this worsens welfare.

Keywords: Emission tax; Endogenous timing; Mixed duopoly; Private duopoly (search for similar items in EconPapers)
JEL-codes: D6 L5 Q28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene, nep-env and nep-ind
Date: 2017-07-24
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https://mpra.ub.uni-muenchen.de/80342/1/MPRA_paper_80342.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/85736/1/MPRA_paper_80342.pdf revised version (application/pdf)

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Journal Article: Endogenous timing in private and mixed duopolies with emission taxes (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:80342

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