Mixed Duopoly and Environment
We show under general demand and cost conditions that in a mixed duopoly with pollution the government can 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. Our result improves on the shortcoming of a pollution tax to implement the social optimum. We also show that when the private firm is partly foreign-owned, the government will adopt some privatization and will not implement the social optimum, though the social optimum is implementable.
Year of publication: |
2014
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Authors: | PAL, RUPAYAN ; SAHA, BIBHAS |
Published in: |
Journal of Public Economic Theory. - Association for Public Economic Theory - APET, ISSN 1097-3923. - Vol. 16.2014, 1, p. 96-118
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Publisher: |
Association for Public Economic Theory - APET |
Saved in:
Online Resource
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