Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74139
Authors: 
Farzin, Y. Hossein
Akao, Ken-Ichi
Year of Publication: 
2006
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 138.2006
Abstract: 
In a duopoly industry with environmentally differentiated products, we examine the effects of introducing a mandatory environmental quality standard on firms’ environmental quality choices, profits, and the average environmental quality offered by the industry. We show that at low standard levels, both firms choose to overcomply regardless of the standard level. At intermediate levels, the mandatory standard can reduce the profit of the low-cost firm while increasing that of the high-cost firm, and that it can lower the industry’s average environmental quality below what it would be without the standard.
Subjects: 
Duopoly
Environmental Quality
Mandatory Environmental Standard
Overcompliance
Product Differentiation
JEL: 
Q58
L13
I51
D43
Document Type: 
Working Paper

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