Mixed Duopoly and Environment

Published By: IGIDR on eSS | Published Date: January, 16 , 2011

They show under general demand and cost conditions that in a mixed duopoly with pollution the government can (and will) implement the socially optimal outputs and abatements by a tax-subsidy scheme and keeping the public firm fully public. The scheme requires taxing outputs and subsidizing abatements at different rates, unlike a pollution tax. Their result contradicts some of the recent claims that social optimum is not implementable and privatization is necessary. They also show that when the private firm is foreign-owned, the government will adopt some privatization and will not implement the social optimum, though the social optimum is implementable. [WP-2011-005] URL: [http://www.igidr.ac.in/pdf/publication/WP-2011-005.pdf]

Author(s): Rupayan Pal, Bibhas Saha | Posted on: Feb 16, 2011 | Views(819) | Download (142)


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