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Environmental Policy for Non-Point Source Pollutions in a Bertrand Duopoly
Department of Economics, Senior Researcher, International Center for further Development of Dynamic Economic Research, Chuo University, Tokyo, Japan
Department of Economics, Chukyo University, Nagoya, Japan
Department of Applied Mathematics, University of Pécs, Pécs, Hungary
- 1 Department of Economics, Senior Researcher, International Center for further Development of Dynamic Economic Research, Chuo University, Tokyo, Japan
- 2 Department of Economics, Chukyo University, Nagoya, Japan
- 3 Department of Applied Mathematics, University of Pécs, Pécs, Hungary
Theoretical Economics Letters·Volume 08 (2018)·Pages 1058–1069·Published 19 March 2018·DOI10.4236/tel.2018.85073
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Abstract
This study investigates the effectiveness of ambient charges under non-point source (NPS) pollutions in an imperfect competition framework. To this end, following Ganguli and Raju, it constructs a one-stage game and a two-stage game in which Bertrand duopolistic firms choose their best prices and abatement technology, respectively. It is demonstrated in both games that an increase in the ambient charge can lead to a decrease in pollution. This finding indicates that the ambient charge can efficiently control pollution in a Bertrand duopoly.
KeywordsNon-Point Source PollutionAbatement TechnologyAmbient ChargeBertrand CompetitionTwo-Stage Game
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