R&D for green technologies in a dynamic oligopoly: Schumpeter, Arrow and inverted-U’s

Feichtinger, Gustav ; Lambertini, Luca ; Leitmann, George ; Wrzaczek, Stefan (2014) R&D for green technologies in a dynamic oligopoly: Schumpeter, Arrow and inverted-U’s. Bologna: Dipartimento di Scienze economiche DSE, p. 28. DOI 10.6092/unibo/amsacta/3981. In: Quaderni - Working Paper DSE (929). ISSN 2282-6483.
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Abstract

We extend a well known differential oligopoly game to encompass the possibility for production to generate a negative environmental externality, regulated through Pigouvian taxation and price caps. We show that, if the price cap is set so as to fix the tolerable maximum amount of emissions, the resulting equilibrium investment in green R&D is indeed concave in the structure of the industry. Our analysis appears to indicate that inverted-U-shaped investment curves are generated by regulatory measures instead of being a "natural" feature of firms’ decisions.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Feichtinger, Gustav
Lambertini, Luca
Leitmann, George
Wrzaczek, Stefan
Keywords
dynamic games, oligopoly, environmental externality, R&D
Subjects
ISSN
2282-6483
DOI
Deposit date
12 Mar 2014 10:43
Last modified
31 Mar 2014 08:29
URI

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