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Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Environmental taxes and industry monopolization
Authors: Schoonbeek, Lambert
de, Vries Frans
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Keywords: Taxes
Market structure
Environmental pollution
Issue Date: Aug-2009
Publisher: Springer
Citation: Schoonbeek L & de Vries F (2009) Environmental taxes and industry monopolization, Journal of Regulatory Economics, 36 (1), pp. 94-106.
Abstract: This paper considers a market with an incumbent monopolistic firm and a potential entrant. Production by both firms causes polluting emissions. The government selects a tax per unit of emission to maximize social welfare. The size of the tax rate affects whether or not the potential entrant enters the market. We identify the conditions that create a market structure where the preferences of the government and the incumbent firm coincide. Interestingly, there are cases where both the government and incumbent firm prefer a monopoly. Hence, the government might induce profitable monopolization by using a socially optimal tax policy instrument.
Type: Journal Article
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Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author; you can only request a copy if you wish to use this work for your own research or private study.
Affiliation: University of Groningen

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