Departmental Bulletin Paper Environmental Effects of Ambient Charge in Cournot Oligopoly.

松本 昭夫  ,  Ferenc  Szidarovszky  ,  薮田 雅弘

This paper investigates the effect caused by an increase in ambient charges on …firm-speci…c and total pollutions in a Cournot oligopoly market. Formalizing pro…t-maximizing behavior in the n-…rm framework with product diiferentiation, we show the static result that ambient change can reduce industrial pollution. We then demonstrate three dynamic results:the …first that Cournot equilibrium can lose stability in the discrete time framework if the number of the …rms 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.

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