Is socially efficient taxation conducive to the win-win solution associated with the strong version of the Porter Hypothesis? Using a Bertrand duopoly yielding a continuum of Nash equilibria, we show that this is true for almost any level of environmental damage and equilibrium pricing strategy. We also prove that the only case in which no conflict arises between private and public incentives is where firms price at marginal cost. This finding suggests that coordination between environmental and competition authorities would be highly desirable.

Flavio Delbono, Luca Lambertini (2022). Optimal emission taxation and the Porter hypothesis under Bertrand competition. ANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, 93, 755-765 [10.1111/apce.12338].

Optimal emission taxation and the Porter hypothesis under Bertrand competition

Flavio Delbono;Luca Lambertini
2022

Abstract

Is socially efficient taxation conducive to the win-win solution associated with the strong version of the Porter Hypothesis? Using a Bertrand duopoly yielding a continuum of Nash equilibria, we show that this is true for almost any level of environmental damage and equilibrium pricing strategy. We also prove that the only case in which no conflict arises between private and public incentives is where firms price at marginal cost. This finding suggests that coordination between environmental and competition authorities would be highly desirable.
2022
Flavio Delbono, Luca Lambertini (2022). Optimal emission taxation and the Porter hypothesis under Bertrand competition. ANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, 93, 755-765 [10.1111/apce.12338].
Flavio Delbono; Luca Lambertini
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/831195
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