The Incentive to Invest in Environmental-Friendly Technologies: Dynamics Makes a Difference

Dragone, Davide ; Lambertini, Luca ; Palestini, Arsen (2009) The Incentive to Invest in Environmental-Friendly Technologies: Dynamics Makes a Difference. Bologna: Dipartimento di Scienze economiche DSE, p. 14. DOI 10.6092/unibo/amsacta/4588. In: Quaderni - Working Paper DSE (658). ISSN 2282-6483.
Full text available as:
[img]
Preview
PDF
License: Creative Commons Attribution Non-commercial

Download (188kB) | Preview

Abstract

The established view on oligopolistic competition with environmental externalities has it that, since firms neglect the external effect, their incentive to invest in R&D for pollution abatement is nil unless they are subject to some form of environmental taxation. We take a dynamic approach to this issue, using a simple differential game to show that the conclusion reached by the static literature is not robust, as the introduction of dynamics shows that firms do invest in R&D for environmental-friendly technologies throughout the game. Moreover, our setup also illustrates the existence of multiple equilibria, only one of which is identified by the corresponding static game.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Dragone, Davide
Lambertini, Luca
Palestini, Arsen
Keywords
pollution, environmental externality, R&D, optimal control, differential games
Subjects
ISSN
2282-6483
DOI
Deposit date
15 Feb 2016 13:03
Last modified
15 Feb 2016 13:03
URI

Other metadata

Downloads

Downloads

Staff only: View the document

^