Optimal pollution control in a mixed oligopoly with research spillovers

Shoji Haruna, Rajeev K. Goel

Research output: Contribution to journalArticlepeer-review

25 Citations (Scopus)


We study optimal pollution abatement under a mixed oligopoly when firms engage in emissions-reducing research and development (R&D) with imperfect appropriation. The regulator uses a tax to curb emissions. Results show that in a mixed oligopoly, the public firm has positive emissions reduction in equilibrium; however, emissions reductions of the private firm could be positive or zero. Under certain conditions, the optimal pollution tax is positive; otherwise, the tax reverts to a subsidy. Comparing mixed and private duopolies, privatisation leads to reductions in R&D and output, but to an increase in overall emissions, so privatisation tends to make the environment worse.

Original languageEnglish
Pages (from-to)21-40
Number of pages20
JournalAustralian Economic Papers
Issue number1
Publication statusPublished - Mar 2019
Externally publishedYes


  • abatement
  • D43
  • D62
  • mixed oligopoly
  • O33
  • pollution
  • Q55
  • R&D
  • spillovers
  • taxation

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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