An excessive development of green products?
Autor: | Ana Espinola-Arredondo, Felix Munoz-Garcia |
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Rok vydání: | 2015 |
Předmět: |
jel:C93
Excessive entry Product differentiation Environmental damage jel:C72 05 social sciences jel:H41 Social Welfare Product differentiation Outcome (game theory) Incentive Economy 0502 economics and business Economics jel:Q25 050202 agricultural economics & policy Product (category theory) 050207 economics Business and International Management General Economics Econometrics and Finance Industrial organization Public finance |
Zdroj: | Economics of Governance. 17:101-129 |
ISSN: | 1435-8131 1435-6104 |
Popis: | This paper examines firms’ incentives to develop a new (green) product, which might compete against the pollutant (brown) good that they traditionally sell. We show that in equilibrium more than one firm might develop a green product, but such an equilibrium outcome is not necessarily efficient. In particular, we predict an excessive amount of green goods under certain conditions, namely, when the green product is extremely clean but both products are not sufficiently differentiated in their attributes, and when the green product is not significantly cleaner than the brown good. We finally provide policies that help regulatory authorities promote equilibrium outcomes yielding the highest social welfare. |
Databáze: | OpenAIRE |
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