Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159522
Authors: 
Dragone, Davide
Lambertini, Luca
Leitmann, George
Palestini, Arsen
Year of Publication: 
2009
Series/Report no.: 
Quaderni - Working Paper DSE 681
Abstract: 
We model a dynamic monopoly with environmental externalities,investigating the adoption of a tax levied on the firm's instantaneous contribution to the accumulation of pollution. The latter process is subject to a shock, which is i.i.d. across instants. We prove the existence of an optimal tax rate such that the monopoly replicates the same steady state welfare level as under social planning. Yet, the corresponding output level, R&D investment for environmental friendly technologies and surplus distribution necessarily differ from the socially optimal ones.
JEL: 
C61
H21
H23
Q52
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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