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.
Vertical Differentiation in a Cournot Industry: The Porter Hypothesis and Beyond / L. Lambertini; A. Tampieri. - In: RESOURCE AND ENERGY ECONOMICS. - ISSN 0928-7655. - STAMPA. - 34:(2012), pp. 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.
