Firm Incentives for Environmental R&D Under Non-Cooperative and Cooperative PoiciesMPRA Paper No. 24754, posted 02. September 2010. (2010)
AbstractThis paper investigates ﬁrm incentives for developing environmentally clean technologies in a simple two-country model with international oligopoly, and compares them under price and quantity regulations with and without policy cooperation between governments. Under any policy regime, whether ﬁrm incentives are either excessive or insufﬁcient from a welfare point of view depends on the marginal environmental damage and the degree of emission spillovers. If the marginal damage is relatively large, a quantity instrument encourages innovation more than a price instrument. In addition, under either regime of price and quantity regulations, policy cooperation (harmonization) necessarily enhances welfare in each country, but it does not necessarily increase ﬁrms' innovation incentives.
Citation InformationKeisuke Hattori. "Firm Incentives for Environmental R&D Under Non-Cooperative and Cooperative Poicies" MPRA Paper No. 24754, posted 02. September 2010. (2010)
Available at: http://works.bepress.com/hattori/8/