Green Patents in an Oligopolistic Market with Green Consumers

Corinne Langinier and Amrita Ray Chaudhuri

No 2024-7, Working Papers from University of Alberta, Department of Economics

Abstract: We analyze the impact of patent policies and emission taxes on green innovation. We allow for strategic interactions of firms in a duopolistic market in the presence of green conscious consumers. We identify a paradoxical effect of increasing emission taxes beyond a certain threshold which results in an increase in emissions. Decreasing patenting costs mitigates this paradox, while the impact of tightening patentability requirements is more complex. Moreover, we show that the greater the proportion of green-conscious consumers, the less likely firms are to license a green patent, which results in higher emissions levels. With green consumers, the lowest emissions occur for an intermediate range of taxes for which licensing does occur. Finally, we find that while tax increases lead to a switch from overinvestment to underinvestment in the absence of green conscious consumers, they have the reverse effect in their presence.

Keywords: Patent; Green Innovation; Pollution (search for similar items in EconPapers)
JEL-codes: L13 O34 Q50 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2024-10-10
New Economics Papers: this item is included in nep-com, nep-ene, nep-env, nep-gth, nep-ind, nep-ino, nep-ipr, nep-res and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2024_007

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