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Asymmetric regulation of identical polluters in oligopoly models No 2004046, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Abstract: Studies of second-b est environmental regulation ofiden tical polluting agents have invariably ignored potentially welfare-improving asymmetric regulation by imposing equal regulatory treatment of identical firms at the outset. Yet, cost asymmetry between oligopoly firms may well give rise to private as well as social gains. A trade-off is demonstrated for the regulator, between private costs savings and additional social costs when asymmetric treatment is allowed. Asymmetry is indeed optimal for a range of plausible parameter values. Further, it is demonstrated that for a broad class of abatement cost functions, there is scope for increasing welfare while keeping both total output and total emission constant. Some motivating policy issues are discussed in light ofthe results, including international harmonization and global carbon dioxide reduction.
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Rabah Amir (
[email protected]) and Niels Nannerup
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Keywords: asymmetric emissions regulation; polluting oligopolists; EU harmonization (search for similar items in EconPapers) JEL-codes: Q2 D8 (search for similar items in EconPapers) Date: 2004-06 References: View references in EconPapers View complete reference list from CitEc Citations Track citations by RSS feed
Downloads: (external link) https://uclouvain.be/en/research-institutes/immaq/core/dp-2004.html (text/html) Related works: Journal Article: Asymmetric Regulation of Identical Polluters in Oligopoly Models (2005) This item may be available elsewhere in EconPapers: Search for items with the same title. Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text
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