Suchergebnisse

AbstractWe analyze non-cooperative environmental policy when the only strategic interaction between countries is through bilateral transboundary pollution, i.e., countries are closed or small open economies. Under simultaneous moves, there is no carbon leakage. However, in the sequential-move game, carbon leakage occurs; the leader sets its pollution tax lower than that in the simultaneous-move game and lower than the marginal damage from own pollution, while the follower sets its tax higher than that in the simultaneous-move game. The only motive behind the leader's underregulation of own pollution is to reduce the incidence of transboundary pollution from the follower. If pollution is a pure global public bad, aggregate pollution is higher in the sequential-move game than in the simultaneous-move game. The leader (follower) obtains higher (lower) welfare than that under simultaneous moves. Hence, if countries can choose to be leaders or followers, they choose to move first to set environmental taxes.

Producers are subject to similar production risks, and so their outputs are likely correlated. Using the entire data‐set rather than summary statistics, we study an ordinal definition of systematic risk. For risk‐neutral producers in perfect competition, we trace the effects of an increase in systematic risk through to impacts on welfare measures and production decisions. Expected welfare falls under more systematic risk, but either of expected producer surplus or expected consumer surplus may rise. Our definition of systematic risk also has relevance for the incentive to incur R&D expenditures, the benefits of diversity and the gains from risk‐sharing.

We consider a model in which an innovating monopolist of a technologically superior intermediate input must sell this product to final output producers. Prior research shows that, with complete information, the monopolist's optimal strategy will lead to complete adoption of this technologically superior innovation. In this article we show that, when the price of some competitively supplied input used in the final product market is endogenous and is altered by adoption of the innovation, then the optimal pricing strategy of the monopolist may lead to incomplete innovation. Thus, the standard result of complete adoption of the superior technology is partly attributable to the partial equilibrium nature of prior models.

Abstract.  We develop a model with one innovating northern firm and heterogeneous southern firms that compete in a final product market. We assume southern firms differ in their ability to adapt technology and study southern incentives to protect intellectual property rights. We find that, in a non‐cooperative equilibrium, governments resist IPR protection, but collectively southern countries benefit from some protection. We show that, in general, countries with more efficient firms prefer higher collective IPR protection than those with less efficient firms. Given the aggregate level of IPR protection, it is more efficient if the more efficient countries have weaker IPR protection.