|Appears in Collections:||Economics Working Papers|
|Peer Review Status:||Unrefereed|
|Title:||Environmental Taxes and Industry Monopolization|
de, Vries Frans
|Citation:||Schoonbeek L & de Vries F (2008) Environmental Taxes and Industry Monopolization. Stirling Economics Discussion Paper, 2008-19.|
|Series/Report no.:||Stirling Economics Discussion Paper, 2008-19|
|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 emission by maximizing 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:||Working or Discussion Paper|
|Affiliation:||University of Groningen|
|SEDP-2008-19-Schoonbeek-de-Vries.pdf||236.86 kB||Adobe PDF||View/Open|
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