Applying Antitrust Policy for Environmental Protection

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概要

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• The welfare effect of input price discrimination has been intensively studied for the last two decades. In this paper, we apply the analysis of input price discrimination to the problem of environmental regulation. We assume that firms compete in quantities in a downstream market. These firms use both clean and dirty inputs in their productions. The clean inputs are supplied by an upstream monopolist that may price discriminate against the downstream firms. The use of the dirty inputs causes environmental pollution and the government levies a pollution tax on the pollution emission. We show that the upstream monopolist charges the environmentally friendly firm a higher price than it does the environmentally unfriendly firm. We demonstrate that such input price discrimination increases pollution emissions, lowers the effectiveness of pollution taxation, and undermines social welfare. We argue that the government can enhance social welfare by implementing a tax-subsidy policy mix.

• 関西大学の論文

著者

• Sugeta Hajime

  Kansai University

• Matsumoto Shigeru

  Kansai University

関連論文

• Applying Antitrust Policy for Environmental Protection

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