TY - JOUR
T1 - Market power and compliance with output quotas
AU - Hatcher, Aaron
N1 - Institution:
University of Portsmouth.
Department:
Centre for the Economics and Management of Aquatic Resources.
PY - 2012/1
Y1 - 2012/1
N2 - This paper examines the compliance behaviour of a dominant firm in an output quota market when the firm is able to exercise market power in both the quota and the output markets. Provided the firm has an initial quota endowment which is strictly positive, under some circumstances the firm may find it profitable to comply or even over-comply in its quota demand, even in the absence of enforcement. The results are compared to those found in the pollution permit literature for a firm with market dominance only in the permit market, to which some additional observations are also added concerning efficiency outcomes under non-compliance.
AB - This paper examines the compliance behaviour of a dominant firm in an output quota market when the firm is able to exercise market power in both the quota and the output markets. Provided the firm has an initial quota endowment which is strictly positive, under some circumstances the firm may find it profitable to comply or even over-comply in its quota demand, even in the absence of enforcement. The results are compared to those found in the pollution permit literature for a firm with market dominance only in the permit market, to which some additional observations are also added concerning efficiency outcomes under non-compliance.
U2 - 10.1016/j.reseneeco.2011.12.002
DO - 10.1016/j.reseneeco.2011.12.002
M3 - Article
SN - 0928-7655
VL - 34
SP - 255
EP - 269
JO - Resource and Engery Economics
JF - Resource and Engery Economics
ER -