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dc.contributor.author
Meunier, Guy
dc.contributor.author
Nicolaï, Jean-Philippe
dc.date.accessioned
2019-05-29T08:25:46Z
dc.date.available
2017-06-13T21:39:57Z
dc.date.available
2019-05-29T08:25:46Z
dc.date.issued
2014-02
dc.identifier.uri
http://hdl.handle.net/20.500.11850/154323
dc.identifier.doi
10.3929/ethz-a-010075861
dc.description.abstract
We study the effect of a shock on firms’ costs in a general setting by considering both perfect and imperfect competition and a general cost function. We show that, counterintuitively, firms’ profits may increase with cost increases. We generalize Seade’s (1985) results by considering the adaptation of firms’ technological process. We find an additional effect that we call "technology effect," and which is determined by the extent to which firms’ marginal and average costs differ as a result of a shock. This effect is broken down into two components: the "indirect technology effect," which is related to the elasticity of the demand slope, and the"direct technology effect," which is solely related to technology. We apply this framework to environmental regulations, which provide a good context in which to examine technological process adaptation because they push firms to use abatement technologies and to modify their production processes. We introduce an explicit abatement cost function that is sufficiently flexible to represent the various types of abatement technologies that are found in the literature: end-of-pipe technology, process-integrated technology, and cleaner production (or fuel switching). We show that end-of-pipe abatement technologies induce a positive direct technology effect, that process integrated abatement technologies induce a negative technology effect, and that cleaner production induces a nulltechnology effect.
en_US
dc.format
application/pdf
en_US
dc.language.iso
en
en_US
dc.publisher
ETH Zurich, Center of Economic Research (CER-ETH)
en_US
dc.rights.uri
http://rightsstatements.org/page/InC-NC/1.0/
dc.subject
Cournot oligopoly
en_US
dc.subject
Perfect competition
en_US
dc.subject
Cost increase
en_US
dc.subject
Tax on emissions
en_US
dc.subject
Environmental standards
en_US
dc.subject
Abatement technologies
en_US
dc.title
Higher costs for higher profits: A general assessment and an application to environmental regulations
en_US
dc.type
Working Paper
dc.rights.license
In Copyright - Non-Commercial Use Permitted
dc.date.published
2014
ethz.journal.title
Economics Working Paper Series
ethz.journal.volume
14/191
en_US
ethz.size
30 p.
en_US
ethz.code.ddc
3 - Social sciences::330 - Economics
en_US
ethz.code.ddc
5 - Science::510 - Mathematics
en_US
ethz.publication.place
Zurich
en_US
ethz.publication.status
published
en_US
ethz.leitzahl
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
en_US
ethz.date.deposited
2017-06-13T21:47:09Z
ethz.source
ECOL
ethz.identifier.importid
imp59366b51defd213592
ethz.ecolpid
eth:8050
ethz.eth
yes
en_US
ethz.availability
Open access
en_US
ethz.rosetta.installDate
2017-07-19T06:09:19Z
ethz.rosetta.lastUpdated
2019-05-29T08:26:00Z
ethz.rosetta.exportRequired
true
ethz.rosetta.versionExported
true
ethz.COinS
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