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Technische Universität Braunschweig >
Institut für Volkswirtschaftslehre, Technische Universität Braunschweig >
Economics Department Working Paper Series, TU Braunschweig >
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http://hdl.handle.net/10419/51319
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| Title: | | Welfare effects of subsidizing a dead-end network of less polluting vehicles  |
| Authors: | | Dietrich, Antje-Mareike Sieg, Gernot |
| Issue Date: | | 2011 |
| Series/Report no.: | | Economics Department Working Paper Series 12 |
| Abstract: | | This article shows that in the presence of environmental externalities, it may be welfare enhancing to overcome a technological lock-in by a deadend technology through governmental intervention. It is socially desirable to subsidize a dead-end technology if its environmental externality is small relative to the one of the established technology, if the installed base and/or the strength of the network effect is small and if future generations matter. Applying our results to the private transport sector, governments promoting alternatives to gasoline-driven vehicles have to be aware of these opposing welfare effects. |
| Subjects: | | environmental externalities network effects private transport technological change |
| JEL: | | O33 L92 Q55 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Economics Department Working Paper Series, TU Braunschweig
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