RT Monograph
SR 00
A1 Burani, Nadia
A1 Mantovani, Andrea
T1 Environmental policies with green network effect and price discrimination
YR 2024
FD 2024-02
VO 24-1513
SP 38
K1 bidimensional product differentiation
K1 environmental concern
K1 green network effect
K1 pollution emissions
K1 price discrimination
K1 subsidy
AB We consider a duopolistic market in which a green firm competes with a brown rival, and both firms offer vertically differentiated products. Consumers are heterogeneous in both their willingness to pay for intrinsic quality and environmental concern. The latter is positively related to the green firm's market share, giving rise to a green network e¤ect. We characterize how price and quality schedules are set and how consumers sort between the two firms at the market equilibrium. When considering pollution both from consumption and production, we compute total welfare and evaluate the impact of an emission tax and a subsidy for the consumption of the green good. Our analysis demonstrates that efficiency can be achieved through an emission tax, which restores the optimal differential between firms' intrinsic qualities, combined with a discriminatory subsidy, which restores the optimal sorting of consumers.
T2 TSE Working Paper
PB TSE Working Paper
PP Toulouse
AV Published
LK https://publications.ut-capitole.fr/id/eprint/48718/
UL http://tse-fr.eu/pub/129135