Roy Chowdhury, Prabal (2010): The Porter Hypothesis and Hyperbolic Discounting.
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We examine pollution-reducing R&D by a monopoly firm producing a dirty product. In a dynamic framework with hyperbolic discounting, we establish conditions under which the Porter hypothesis goes through, i.e. environmental regulation increases R&D, thus reducing pollution, as well as increasing firm profits. This is likely to hold whenever R&D costs are at an intermediate level, and the planning horizon of the firms is large.
|Item Type:||MPRA Paper|
|Original Title:||The Porter Hypothesis and Hyperbolic Discounting|
|Keywords:||Porter hypothesis; abatement tax; R&D; hyperbolic discounting;|
|Subjects:||Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy-Making and Implementation
D - Microeconomics > D4 - Market Structure and Pricing > D42 - Monopoly
|Depositing User:||Prabal Roy Chowdhury|
|Date Deposited:||06. Jul 2010 16:58|
|Last Modified:||16. Feb 2013 06:44|
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