ABSTRACT This study investigates the effectiveness of ambient
charges under non-point source (NPS) pollutions in an imperfect competition
framework. To this end, following Ganguli and Raju, it constructs a one-stage
game and a two-stage game in which Bertrand duopolistic firms choose their best
prices and abatement technology, respectively. It is demonstrated in both games
that an increase in the ambient charge can lead to a decrease in pollution.
This finding indicates that the ambient charge can efficiently control
pollution in a Bertrand duopoly.
Cite this paper
Matsumoto, A. , Nakayama, K. and Szidarovszky, F. (2018) Environmental Policy for Non-Point Source Pollutions in a Bertrand Duopoly. Theoretical Economics Letters, 8, 1058-1069. doi: 10.4236/tel.2018.85073.
 Ganguli, S. and Raju, S. (2012) Perverse Environmental Effects of Ambient Charges in a Bertrand Duopoly. Journal of Environmental Economics and Policy, 1, 289-296. https://doi.org/10.1080/21606544.2012.714972
 Segerson, K. (1988) Uncertainty and Incentives for Non-Point Pollution Control. Journal of Environmental Economics and Management, 15, 87-98.
 Raju, S. and Ganguli, S. (2013) Strategic Firm Interaction, Return to Scale, Environmental Regulation and Ambient Charges in a Cournot Duopoly. Technology and Investment, 4, 113-122. https://doi.org/10.4236/ti.2013.42014
 Matsumoto, A., Szidarovszky, F. and Yabuta, M. (2018) Environmental Effects of Ambient Charge in Cournot Oligopoly. Journal of Environmental Economic Policy, 7, 41-56. https://doi.org/10.1080/21606544.2017.1347527
 Ishikawa, T., Matsumoto, A. and Szidarovszky, F. (2017) Regulation of Non-Point Source Pollution under n-Firm Bertrand Competition. IERCU DP #284, Institute of Economic Research, Chuo University.