Emission tax and optimal privatization in Cournot–Bertrand comparison

Xu, Lili; Cho, Sumi; Lee, Sang‐Ho

doi:10.1016/j.econmod.2016.02.008

Cited by 78 publications

(59 citation statements)

References 36 publications

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“…Thus, our second objective is to analyse how the environmental attitude of a public firm affects the R&D subsidy policy. Today, privatisation (or partial privatisation) of public firms has been a feature of government policy in many developing as well as developed countries (Xu, Cho, & Lee, 2016). Does the decision whether to privatise a public firm affect the environmental R&D subsidy policy, environmental R&D, environmental damage and welfare?…”

Section: Introductionmentioning

confidence: 99%

“…Moreover, the effect of privatisation on the total R&D, environmental damage and welfare could be different when other environmental policies are used. For instance, if an environmental tax is employed, privatisation may damage the environment (Pal & Saha, 2015;Tsai, Wang, & Chiou, 2016;Xu et al, 2016;Haruna & Goel, 2019) and it always leads to reductions in the total R&D (Haruna & Goel, 2019) and welfare (Tsai et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

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Environmental R&D subsidy, spillovers and privatization in a mixed duopoly

Xing

Tan

Wang

2019

Economic Research-Ekonomska Istraživanja

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The study considers an environmental R&D subsidy in a mixed duopoly with spillovers. Public and private firms compete in environmental R&D investments and the government sets the subsidy to environmental R&D. This study examines three cases: (a) the public firm cares for the environment and maximises the welfare; (b) it does not care for the environment and maximises the sum of consumer and producer surpluses net of subsidy; and (c) it is privatised and maximises its own profit. The main findings are as follows: 1) the optimal subsidies are positive in all three cases; 2) the optimal subsidy always increases with spillovers in case (a), but it may decrease with spillovers in cases (b) and (c); 3) the optimal subsidy is higher in case (a) than in case (b) if the seriousness of environmental damage generated by pollution is small, however the opposite case may be the case if it is large; 4) the use of subsidy results in higher total R&D and lower environmental damage in all three cases; 5) privatisation lowers optimal subsidy (or environmental damage) no matter whether the public firm cares for the environment or not; and 6) privatisation reduces welfare if the public firm cares for the environment, but may raise welfare if it does not care for the environment.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Environmental R&D subsidy, spillovers and privatization in a mixed duopoly

Xing

Tan

Wang

2019

Economic Research-Ekonomska Istraživanja

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“…We revisit the classic Bertrand-Cournot comparisons with advertising competition in a differentiated mixed duopoly market where a welfare-maximizing public firm competes with profit maximizing private firm. Comparing the results between Bertrand and Cournot equilibria, we show that most results in the previous literature on the mixed markets, e.g., Ghosh and Mitra [2] [7], Matsumura and Ogawa [3], Matsumura and Sunada [8], Haraguchi and Matsumura [9], Scrimitore [10], and Xu, et al [6], still hold even though advertisement was taken into account. However, there are some more interesting findings when we compare the results with the social optimum.…”

Section: Introductionmentioning

confidence: 52%

Bertrand-Cournot Comparison in a Mixed Duopoly with Advertisement

Park¹,

Li²,

Lee³

2016

TEL

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We examine the Bertrand-Cournot comparison with advertisement in a differentiated mixed duopoly market, and compare with the social optimum. We show that not only both firms' quantities but also both firms' advertisements are higher (lower) in Cournot (Bertrand) than the social optimum. Thus, both firms engage in excessive (insufficient) advertisement in Cournot (Bertrand). We also show that despite lower both firms' prices in Cournot, both firms' profits and social welfare are strictly higher in Bertrand and thus, both firms prefer Bertrand to Counrnot.

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“…Furthermore, EU countries lead the development of environmental policies for the sustainability in a warming planet and have a non-negligible presence of public enterprises in energy-consuming industries such as transportation and automobile industries. More related descriptions can be found in Wang and Wang (2009), Pal and Saha (2014, 2015 and Xu, et al (2016). 3 Several researchers have recently analyzed the environmental concerns of a mixed market.…”

Section: Introductionmentioning

confidence: 99%

“…2 In the presence of environmental externalities, the analysis of mixed oligopolies has been prominent and thus the possible benefits of public ownership have also motivated recent analyses on mixed markets. 3 For example, Pal andSaha (2014, 2015) and Xu et al (2016) have recently explored the interaction between privatization and emission tax in order to explain how privatization policies and emission tax affect environmental damage and social welfare. However, previous studies on environmental issues consider an exogenously fixed timing game and hence have very restrictive implications.…”

Section: Introductionmentioning

confidence: 99%

Endogenous timing in private and mixed duopolies with emission taxes

Lee

2017

J. Econ.

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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.

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Emission tax and optimal privatization in Cournot–Bertrand comparison

Cited by 78 publications

References 36 publications

Environmental R&D subsidy, spillovers and privatization in a mixed duopoly

Environmental R&D subsidy, spillovers and privatization in a mixed duopoly

Bertrand-Cournot Comparison in a Mixed Duopoly with Advertisement

Endogenous timing in private and mixed duopolies with emission taxes

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