Upcoming seminars
25/02/2026 at 1 pm
Luis Granero
(Universitat de Valencia, Spain)
"Environmental Policies under Monopolistic Competition when Consumers Care for the Environment"
Abstract: This paper considers a horizontal product differentiation model with polluting firms and environmentally aware consumers to evaluate the effect of an emissions tax and a subsidy for clean technologies on firm entry, environmental quality, emissions and welfare. Our findings establish that the effects of environmental policies on the market equilibrium depend on the degree of competition determined by the entry cost. When competition is strong, the two policies promote entry as well as the adoption of greener technologies and they both reduce emissions, but the tax dominates the subsidy in welfare terms. When competition is weak, the tax leads some firms to leave the industry and reduces emissions, but it has an ambiguous effect on the technology choice. The subsidy still promotes firm entry and the adoption of greener technologies, but it can increase emissions if competition is particularly weak. Interestingly, only in this case, the subsidy can yield a higher welfare level than the tax. We also find that when competition is weak there is a range of values for the entry cost for which no regulation is the best alternative.
How to attend the seminar:
The seminar will be on-site in room Módulo 1-301 and streamed.
To receive the seminar invitation with the streaming link, please send an email to teoriahistoriauam@gmail.com
Organisers: Jorge García Hombrados, Ana Nuevo Chiquero, Eugenio Zucchelli and Damian Pierri