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Article
The organization of R&D and environmental policy
Journal of Economic Behavior and Organization (2007)
  • Joanna Poyago-Theotoky, Loughborough University
Abstract

We consider a setting where firms undertake emission-reducing R&D and the regulator, who sets the

emission tax, is unable to commit credibly. Firms are subject to research spillovers in emission reduction.

We examine two regimes with respect to the organization of R&D: independent R&D and an environmental

R&D cartel (ERC).

Environmental R&D is higher in the ERC compared to independent R&D for small damages and also

for large damages when R&D is efficient. In contrast, when damages are large and R&D is inefficient the

opposite is true. The same ranking applies to the comparison of social welfare.

Publication Date
2007
Citation Information
Joanna Poyago-Theotoky. "The organization of R&D and environmental policy" Journal of Economic Behavior and Organization Vol. 62 Iss. 1 (2007)
Available at: http://works.bepress.com/joanna_poyago_theotoky/5/