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|Título:||Environmental Regulation and Technological Innovation with Spillovers|
Gata, João E.
dynamic technology-forcing regulation
|Editora:||ISEG – Departamento de Economia|
|Citação:||Banerjee, Samiran e João E. Gata. 2004. "Environmental Regulation and Technological Innovation with Spillovers". Instituto Superior de Economia e Gestão - DE Working papers nº 16-2004/DE/UECE|
|Relatório da Série N.º:||DE Working papers;nº 16-2004/DE/UECE|
|Resumo:||We present a two-period dynamic model of standard setting under asymmetric information to model the attempts by the Califormia Air Resources Board (CARB) in getting car manufacturers to comply with its phase-in of stringent emissions standards. After CARB chooses an initial emissions standard that firms are required to comply with, automakers respond by choosing R&D investment and production levels which provide CARB an imperfect signal whether they are more or less capable of complying with the standard. CARB resets the environmental standard and the firms once again choose research and production levels. Firms are Cournot duopolists in the product market and can choose to do research noncooperatively or cooperatively in the presence of spillovers. We show that firms will behave strategically and underinvest in research both under competitive and cooperative R&D, though the level of underinvestment — the ratchet effect — is greater under cooperative R&D when spillovers are large. We uncover a fundamental conflict between the incentives of firms to do cooperative research and social welfare: that firms will want to engage in cooperative (resp. noncooperative) R&D only when spillovers are low (resp. high) while social welfare is greater under noncooperative (resp. cooperative) research.|
|Versão do Editor:||https://aquila1.iseg.utl.pt/aquila/getFile.do?method=getFile&fileId=26417|
|Aparece nas colecções:||DE - Documentos de trabalho / Working Papers|
UECE - Documentos de Trabalho / UECE - Working Papers
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