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Effective ambient charges on non-point source pollution in a two-stage Bertrand duopoly

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  • Akio Matsumoto
  • Ferenc Szidarovszky

Abstract

This paper analyses the effectiveness of the ambient charges for controlling emissions of non-point source pollutions. To this end, we construct a two-stage Bertrand duopoly game, in which optimal abatement technologies are chosen first and then the optimal prices as well as the optimal productions are determined. It is shown that the ambient charge is always effective at the second stage. Since the effect could be ambiguous at the first stage, this paper sheds light on the conditions under which the ambient charge becomes effective.

Suggested Citation

  • Akio Matsumoto & Ferenc Szidarovszky, 2021. "Effective ambient charges on non-point source pollution in a two-stage Bertrand duopoly," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 10(1), pages 74-89, January.
    • Handle: RePEc:taf:teepxx:v:10:y:2021:i:1:p:74-89
    DOI: 10.1080/21606544.2020.1786465
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    Cited by:

    1. Ohnishi, Kazuhiro, 2024. "Pollution, partial privatization and the effect of ambient charges: price competition," MPRA Paper 120531, University Library of Munich, Germany.
    2. Ohnishi, Kazuhiro, 2021. "Pollution, partial privatization and the effect of ambient charges," MPRA Paper 109592, University Library of Munich, Germany, revised 04 Sep 2021.

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