To abate, or not to abate? A strategic approach on green production in Cournot and Bertrand duopolies

摘要: Abstract This research analyses firms' strategic choice of adopting an abatement technology in environment with pollution externalities when the government levies emission tax to incentivise firms undertake emission-reducing actions. A set different Nash equilibria – ranging from dirty green production arises both quantity-setting and price-setting duopolies. Results show that if societal awareness towards a clean is relatively low (resp. high) index measuring relative cost high low), interaction between two independent, competing, selfish playing game leads them not abate abate) as Pareto efficient outcome: no conflict exists self-interest mutual benefit undertake) emissions-reducing Multiple or “green” prisoner's dilemma can also emerge pure strategies. When anti-prisoner's (deadlock), society better off, social welfare under always larger than abatement. These findings suggest living sustainable encourages improvement public education systems for achievement eco-responsible attitude development technologies through ad hoc R&D.