We modify the vertically differentiated duopoly model by André et al. (2009) replacing Bertrand with Cournot behaviour, and we characterise the region wherein a Porter-type result takes place. We show that the Porter hypothesis applies in an equilibrium taking always the form of a prisoner’s dilemma. Moreover, whenever the asymmetry in the cost parameters between green and brown technology is not too high, a class of equilibria emerges wherein firms converge spontaneously onto the green standard as a result of dominant strategies, any environmental regulation being altogether absent.
L. Lambertini, A. Tampieri (2012). Vertical Differentiation in a Cournot Industry: The Porter Hypothesis and Beyond. RESOURCE AND ENERGY ECONOMICS, 34, 374-380 [10.1016/j.reseneeco.2012.03.001].
Vertical Differentiation in a Cournot Industry: The Porter Hypothesis and Beyond
LAMBERTINI, LUCA;TAMPIERI, ALESSANDRO
2012
Abstract
We modify the vertically differentiated duopoly model by André et al. (2009) replacing Bertrand with Cournot behaviour, and we characterise the region wherein a Porter-type result takes place. We show that the Porter hypothesis applies in an equilibrium taking always the form of a prisoner’s dilemma. Moreover, whenever the asymmetry in the cost parameters between green and brown technology is not too high, a class of equilibria emerges wherein firms converge spontaneously onto the green standard as a result of dominant strategies, any environmental regulation being altogether absent.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
