Mixed duopoly and environment.

Saha, B.; Pal, R.

Abstract

We show under general demand and cost conditions that in a mixed duopoly with pollution the government can implement the socially optimal outputs and abatements by a tax-subsidy scheme and keeping the public firm fully public. The scheme requires taxing outputs and subsidizing abatements at different rates, unlike a pollution tax. Our result improves on the shortcoming of a pollution tax to implement the social optimum. We also show that when the private firm is partly foreign-owned, the government will adopt some privatization and will not implement the social optimum, though the social optimum is implementable.

Citation

Saha, B., & Pal, R. (2014). Mixed duopoly and environment. Journal of Public Economic Theory, 16(1), 96-118. https://doi.org/10.1111/jpet.12056

• Journal Article Type: Article
• Acceptance Date: Feb 16, 2012
• Online Publication Date: Jul 29, 2013
• Publication Date: 2014-02
• Deposit Date: Aug 7, 2014
• Journal: Journal of Public Economic Theory
• Print ISSN: 1097-3923
• Electronic ISSN: 1467-9779
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 16
• Issue: 1
• Pages: 96-118
• DOI: https://doi.org/10.1111/jpet.12056
• Public URL: https://durham-repository.worktribe.com/output/1455880