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Controlling non-point source pollution in Cournot oligopolies with hyperbolic demand

Author

Listed:
  • Akio Matsumoto

    (Chuo University)

  • Ferenc Szidarovszky

    (Corvinus University)

Abstract

This paper constructs an n-firm Cournot oligopoly in which the price function is hyperbolic. It provides a game-theoretic approach to characterize the ambient charge’s impact on NPS pollution’s total and individual emission levels. The main findings are as follows: (1) the positivity of individual Cournot output depends on the marginal production cost, the average abatement technology and the number of firms in the industry; (2) the ambient charge is effective for controlling the total amount of NPS pollution when the average marginal production cost is less than the average emission coefficient; (3) the ambient charge is also effective for controlling the individual pollution when the tax rate and the average pollution level are sufficiently high; (4) assuming hyperbolic rather than linear demand, stronger parametric conditions are necessary for the effectiveness of the ambient charge.

Suggested Citation

  • Akio Matsumoto & Ferenc Szidarovszky, 2021. "Controlling non-point source pollution in Cournot oligopolies with hyperbolic demand," SN Business & Economics, Springer, vol. 1(2), pages 1-15, February.
    • Handle: RePEc:spr:snbeco:v:1:y:2021:i:2:d:10.1007_s43546-020-00023-8
    DOI: 10.1007/s43546-020-00023-8
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    References listed on IDEAS

    as
    1. William Novshek, 1985. "On the Existence of Cournot Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(1), pages 85-98.
    2. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
    3. Hideki Sato, 2017. "Pollution from Cournot duopoly industry and the effect of ambient charges," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 6(3), pages 305-308, July.
    4. Toshiharu Ishikawa & Akio Matsumoto & Ferenc Szidarovszky, 2019. "Regulation of non-point source pollution under n-firm Bertrand competition," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(4), pages 579-597, October.
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    Cited by:

    1. Ahmad Naimzada & Marina Pireddu, 2023. "Differentiated goods in a dynamic Cournot duopoly with emission charges on output," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 46(1), pages 305-318, June.
    2. Akio Matsumoto & Ferenc Szidarovszky, 2022. "N-firm oligopolies with pollution control and random profits," Asia-Pacific Journal of Regional Science, Springer, vol. 6(3), pages 1017-1039, October.
    3. Ahmad Naimzada & Marina Pireddu, 2023. "Dynamic approaches for the evaluation of the environmental policy efficacy in a nonlinear Cournot duopoly with differentiated goods and emission charges," Working Papers 517, University of Milano-Bicocca, Department of Economics.
    4. Ahmad Naimzada & Marina Pireddu, 2021. "On the detrimental effects of concave emission charges in a dynamic Cournot duopoly model," Working Papers 466, University of Milano-Bicocca, Department of Economics.

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