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Environmental Policy and Social Efficiency under Free Entry
National Kaohsiung University of Science and Technology, Chinese Taipei
Department of International Business and Trade, Shu-Te University, Chinese Taipei
Management School, Kunming University of Science and Technology, Kunming, China
Department of Marketing and Logistics Management, YuDa University of Science and Technology, Chinese Taipei
National Kaohsiung University of Science and Technology, Chinese Taipei
- 1 National Kaohsiung University of Science and Technology, Chinese Taipei
- 2 Department of International Business and Trade, Shu-Te University, Chinese Taipei
- 3 Management School, Kunming University of Science and Technology, Kunming, China
- 4 Department of Marketing and Logistics Management, YuDa University of Science and Technology, Chinese Taipei
- 5 National Kaohsiung University of Science and Technology, Chinese Taipei
Modern Economy·Volume 10 (2019)·Pages 2110–2119·Published 11 September 2019·DOI10.4236/me.2019.109132
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Abstract
In this paper, we first show that if the firm’s production leads to environmental damage and the government does not implement any environmental policy by using a two-stage game model, the “excess-entry” theorem holds. We then show that entry can be socially insufficient in the presence of production externality and policy mix is needed for pollution control in oligopoly industry with endogenous market structure. Hence, the anti-competitive entry regulation policy suggested by the “excess-entry” theorem does not always hold.
KeywordsPollutionEnvironmentEmission TaxSocial Efficiency
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