Environmental effects of ambient charge in cournot oligopoly

摘要

This paper investigates the effect caused by an increase in ambient charges on firm-specific and total pollutions in a Cournot oligopoly market. Formalising profit-maximising behaviour in the n-firm framework with product differentiation, we show the static result that ambient charge can reduce industrial pollution. We then demonstrate three dynamic results: the first that Cournot equilibrium can lose stability in the discretetime framework if the number of the firms is greater than four, the second that it is always stable in the continuous-time framework and the third that stability can be switched to instability if a delay in production becomes large enough.