Pollution from Cournot duopoly industry and the effect of ambient charges

ABSTRACT

From the perspective of oligopoly theory, this paper clarifies the effectiveness of ambient charges as a policy measure for reducing industrial non-point source pollution. Ganguli and Raju argue that ambient charges have perverse effects in the context of Bertrand competition. By contrast, this paper examines the effects of ambient charges in the context of Cournot competition, clarifying that they are an effective policy measure. The result presented here is consistent with previous results in the field of experimental economics.

KEYWORDS:

• Duopoly market
• emissions
• ambient charges
• Cournot competition
• non-point source pollution

Disclosure statement

No potential conflict of interest was reported by the author.