Environmental research joint ventures in a Cournot duopoly under emission taxes and environmental corporate social responsibility with managerial delegation

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Environmental research joint ventures in a Cournot duopoly under emission taxes and environmental corporate social responsibility with managerial delegation (2024.9)

Yasunori Ouchida （Professor, School of Economics, Hiroshima University and Visiting Researcher of the Competition Policy Research Center）

Nobuyuki Takashima（Associate Professor, School of Economics, Hiroshima University and Visiting Researcher of the Competition Policy Research Center）

Abstract	File （PDF)
This paper examines both the rule of when environmental research joint venture (ERJV) is socially allowable and the optimal emission taxation, assuming a situation in which the government imposes a pollution emission tax on polluting Cournot duopolists whose owners delegate managerial decision-making rights to managers who adopt environmental CSR (ECSR) behavior. The findings of this paper are threefold. First, strategic manipulation of the emissions tax rate, which incentivizes each manager to choose ERJV cooperation, is preferable from the perspective of social welfare. This strategic manipulation contributes to softening the decline in social welfare. Second, government antitrust authorities should always permit the ERJV. This policy recommendation is valid even if decision-making on ERJVs by government antitrust authorities is conducted at the same time as or after decision-making on the emissions tax rate. Third, this paper provides an economic foundation in support of legislating the disclosure of managerial remuneration contracts in ECSR firms.	CPDP96-E(1,070 KB)

Abstract

File （PDF)

　
　This paper examines both the rule of when environmental research joint venture (ERJV) is socially allowable and the optimal emission taxation, assuming a situation in which the government imposes a pollution emission tax on polluting Cournot duopolists whose owners delegate managerial decision-making rights to managers who adopt environmental CSR (ECSR) behavior. The findings of this paper are threefold. First, strategic manipulation of the emissions tax rate, which incentivizes each manager to choose ERJV cooperation, is preferable from the perspective of social welfare. This strategic manipulation contributes to softening the decline in social welfare. Second, government antitrust authorities should always permit the ERJV. This policy recommendation is valid even if decision-making on ERJVs by government antitrust authorities is conducted at the same time as or after decision-making on the emissions tax rate. Third, this paper provides an economic foundation in support of legislating the disclosure of managerial remuneration contracts in ECSR firms.

CPDP96-E

(1,070 KB)