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Environmental effects of ambient charge in cournot oligopoly

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  • Akio Matsumoto
  • Ferenc Szidarovszky
  • Masahiro Yabuta

Abstract

This paper investigates the effect caused by an increase in ambient charges on firm-specific and total pollutions in a Cournot oligopoly market. Formalising profit-maximising behaviour in the n-firm framework with product differentiation, we show the static result that ambient charge can reduce industrial pollution. We then demonstrate three dynamic results: the first that Cournot equilibrium can lose stability in the discrete-time framework if the number of the firms is greater than four, the second that it is always stable in the continuous-time framework and the third that stability can be switched to instability if a delay in production becomes large enough.

Suggested Citation

  • Akio Matsumoto & Ferenc Szidarovszky & Masahiro Yabuta, 2018. "Environmental effects of ambient charge in cournot oligopoly," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 7(1), pages 41-56, January.
    • Handle: RePEc:taf:teepxx:v:7:y:2018:i:1:p:41-56
    DOI: 10.1080/21606544.2017.1347527
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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, 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.
    4. Ming Luo & Ruguo Fan & Yingqing Zhang & Chaoping Zhu, 2020. "Environmental Governance Cooperative Behavior among Enterprises with Reputation Effect Based on Complex Networks Evolutionary Game Model," IJERPH, MDPI, vol. 17(5), pages 1-18, February.

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