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Unequal Treatment of Identical Polluters in Cournot Equilibrium

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  • Per Andersen
  • Frank Jensen

Abstract

Oligopoly models where firms and other agents take prior actions that subsequently affect the marginal costs have long been useful in illuminating policy debates with respect to antitrust regulation, environmental protection, and international competition. In this paper we illustrate the relevance in an environmental Cournot game, where the production technology is characterised by constant returns to scale. It is shown that an asymmetric distribution of emission quotas can be optimal in some, but not all, cases.

Suggested Citation

  • Per Andersen & Frank Jensen, 2005. "Unequal Treatment of Identical Polluters in Cournot Equilibrium," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(4), pages 729-734, December.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200512)161:4_729:utoipi_2.0.tx_2-7
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    References listed on IDEAS

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    1. Bergstrom, Theodore C. & Varian, Hal R., 1985. "Two remarks on Cournot equilibria," Economics Letters, Elsevier, vol. 19(1), pages 5-8.
    2. Maggi, Giovanni, 1996. "Strategic Trade Policies with Endogenous Mode of Competition," American Economic Review, American Economic Association, vol. 86(1), pages 237-258, March.
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    Cited by:

    1. Rupayan Pal, 2012. "Delegation And Emission Tax In A Differentiated Oligopoly," Manchester School, University of Manchester, vol. 80(6), pages 650-670, December.
    2. Rupayan Pal, 2009. "Delegation and Emission Tax in a Differentiated Oligopoly," Working Papers id:2263, eSocialSciences.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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