Green quality choice in a duopoly
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F24%3A10254767" target="_blank" >RIV/61989100:27510/24:10254767 - isvavai.cz</a>
Result on the web
<a href="https://onlinelibrary.wiley.com/doi/10.1111/meca.12460" target="_blank" >https://onlinelibrary.wiley.com/doi/10.1111/meca.12460</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1111/meca.12460" target="_blank" >10.1111/meca.12460</a>
Alternative languages
Result language
angličtina
Original language name
Green quality choice in a duopoly
Original language description
This article considers a quantity-setting duopoly (Cournot rivalry) in which firms adopt an abatement technology as a device to improve the quality of products. Consumer preferences capture vertical product differentiation (quality) towards "green" products. This introduces a trade-off on the production side, as firms that do not abate, in turn, do not sustain any abatement cost but the demand for their product is low. On the contrary, firms that choose to abate incur abatement costs, but the demand for their product is high. The article aims to study and understand whether this kind of preference may lead firms to strategically invest in green technology and introduces a new, private-based (that contrasts the well-known public-based) mechanism through which pollution abatement can emerge as a sub-game perfect Nash equilibrium (SPNE) of a non-cooperative abatement decision game with product quality and complete information. The model is developed in a parsimonious way to pinpoint the main determinants of the endogenous market outcomes ranging from an anti-prisoner's dilemma in which self-interest and mutual benefit of non-abatement do not conflict to an anti-prisoner's dilemma in which self-interest and mutual benefit of abatement do not conflict, passing through to an anti-coordination scenario. Additionally, the welfare analysis reveals the existence of a win-win solution from a societal perspective. The article shows that the results obtained in the Cournot setting also hold considering a Bertrand duopoly.
Czech name
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Czech description
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Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50202 - Applied Economics, Econometrics
Result continuities
Project
<a href="/en/project/GA23-06282S" target="_blank" >GA23-06282S: Evolutionary economic dynamics with finite populations: Modeling and applications</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)
Others
Publication year
2024
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Metroeconomica
ISSN
0026-1386
e-ISSN
1467-999X
Volume of the periodical
75
Issue of the periodical within the volume
4
Country of publishing house
US - UNITED STATES
Number of pages
37
Pages from-to
438-474
UT code for WoS article
001195181000001
EID of the result in the Scopus database
2-s2.0-85189784520