The Environmental Porter Hypothesis as a Technology Adoption Problem?

Ben Kriechel and Thomas Ziesemer ()

No 8, Research Memorandum from Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT)

Abstract: The Porter Hypothesis postulates that the costs of compliance with environmental standards may be offset by adoption of innovations they trigger. We model this hypothesis using a game of timing of technology adoption. We show that times of adoption are earlier the higher the non-adoption tax. The environmental tax turns the preemption game with low profits into a game with credible precommitment yielding high profits (pro-Porter). If there is a precommitment game without environmental taxes, the introduction of a tax leads to lower profits (anti-Porter).

Keywords: economics of technology (search for similar items in EconPapers)
Date: 2005
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Working Paper: The Environmental Porter Hypothesis as a Technology Adoption Problem? (2003)
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