This is an extra credit part of a really neat exercise which covers elements of Imperfect markets (Duopsony), game theory, public economics, positive external benefits Pigouvian taxes and subsidies and elements of General Equilibrium and Cournot-Nash solutions. We will also ha...
energy planning, policy and economyenvironmental policyeconomic analysispollutantspollution sourcestaxesacid raineconomic impacteconomic policysubsidiesThis article derives Pigouvian-type corrective measures for reciprocal externalities when non-Nash behavior characterizes the participants. These reciprocal externalities ...
constructedwithinBuchananandStubblebine(1962)andinterpretedandmodifiedbyTurvey(1963),wherebyinaCoaseanenvironment—whereagentshavetheabilitytocostlesslybargain—thepresenceofaPigouviantaxprovidesadditionalincentivestoreduceharm,whichleadstoanallocativelyinefficientequilibrium.Inparticular,BuchananandStubblebine(1962,p....
Tax aversion makes it politically challenging to introduce Pigouvian taxes. One proposed solution to overcome this resistance is to package policies. Using an online lab experiment, we investigate whether combining a tax and a subsidy is perceived as more acceptable than the tax or the subsidy alone...
Dynamically and statically optimal Pigouvian subsidies and taxes on durables will differ in a growing economy. In a dynamic game, consumers may delay purchasing durables with positive externalities, such as latrines, anticipating greater future subsidies. Governments can most cheaply induce optimal ...