Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155085
Authors: 
Mondello, Gérard
Tidball, Mabel
Year of Publication: 
2000
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 31. 2000
Abstract: 
This paper focuses both on the competition process and the firms liability in environmental protection and the demonstration is made by comparing two models of safety investment. The rst one shows sensitive players to their environmental liability: they seek to minimize the technologies accident risk while the second one corresponds to a much more standard choice. The players main preoccupation is about their market share even if they care about liability. Then, from a very simple duopolistic competition model with strict liability, we show, first, that the way the firms assess the environmental question is not neutral on their expected performances. Second, that the associated level of technology to the liability concern - i.e. a high level of care or a low one- have different impact on profitability. Consequently, the competitors general attitude, their beliefs and the institutional rules have strong e ects on the environmental investment assessments. More precisely, the enforcing rule the players will adopt will play directly on the performance, not only of one firm, but on the whole set of industrial firms.
Subjects: 
duopoly
environmental investment
liability theory
JEL: 
K32
C72
D43
D81
Document Type: 
Working Paper

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