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Cournot competition and “green” innovation: An inverted-U relationship

Hold Date
2017-11-28 12:00〜2017-11-28 13:00
Lecture Room S W1-C-504, West Zone 1, Ito campus, Kyushu University
Object person
Poyago-Theotoky, Joanna (Department of Economics and Finance, La Trobe University)

We examine the relationship between competition and innovation in an industry where production is polluting and R&D has the aim to reduce emissions (“green” innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in “green” R&D. We analyse the case where the emission tax is set endogenously by a committed regulator and uncover an inverted-U relationship between innovation and competition that is mainly driven by the presence of R&D spillovers.