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International Ecolabel Vs National Ecolabels
https://orcid.org/http://orcid.org/0000-0002-6427-4778
We consider a vertically differentiated model with two identical countries each having initially one firm. In a context of open economies, we investigate whether countries would and should cooperate in the creation of an international label. We compare two options: a unique international ecolabel set up by an international authority and two national ecolabels set up non-cooperatively by two national government-sponsored authorities. Firms then choose their environmental qualities and prices. We prove that relative to the case of national ecolabels, the international label lets the global welfare as it is or improves it. However, the improvement is always at the expense of one of the two countries, in which case the international label is not feasible because of the opposition of the aggrieved country. Finally, under some conditions, a subgame-perfect Nash equilibrium fails to exist in the national labels case, while it always exists with an international label. The international program may be relevant in this case to solve the problem of instability of the market that arises with national ecolabels.
International Ecolabel Vs National Ecolabels
https://orcid.org/http://orcid.org/0000-0002-6427-4778
We consider a vertically differentiated model with two identical countries each having initially one firm. In a context of open economies, we investigate whether countries would and should cooperate in the creation of an international label. We compare two options: a unique international ecolabel set up by an international authority and two national ecolabels set up non-cooperatively by two national government-sponsored authorities. Firms then choose their environmental qualities and prices. We prove that relative to the case of national ecolabels, the international label lets the global welfare as it is or improves it. However, the improvement is always at the expense of one of the two countries, in which case the international label is not feasible because of the opposition of the aggrieved country. Finally, under some conditions, a subgame-perfect Nash equilibrium fails to exist in the national labels case, while it always exists with an international label. The international program may be relevant in this case to solve the problem of instability of the market that arises with national ecolabels.
International Ecolabel Vs National Ecolabels
https://orcid.org/http://orcid.org/0000-0002-6427-4778
We consider a vertically differentiated model with two identical countries each having initially one firm. In a context of open economies, we investigate whether countries would and should cooperate in the creation of an international label. We compare two options: a unique international ecolabel set up by an international authority and two national ecolabels set up non-cooperatively by two national government-sponsored authorities. Firms then choose their environmental qualities and prices. We prove that relative to the case of national ecolabels, the international label lets the global welfare as it is or improves it. However, the improvement is always at the expense of one of the two countries, in which case the international label is not feasible because of the opposition of the aggrieved country. Finally, under some conditions, a subgame-perfect Nash equilibrium fails to exist in the national labels case, while it always exists with an international label. The international program may be relevant in this case to solve the problem of instability of the market that arises with national ecolabels.
International Ecolabel Vs National Ecolabels
Environ Model Assess
Bouziri, A. (author) / Ghazzai, H. (author) / Lahmandi-Ayed, R. (author)
Environmental Modeling & Assessment ; 26 ; 849-869
2021-10-01
21 pages
Article (Journal)
Electronic Resource
English
Environmental quality , International ecolabel , National ecolabels , Vertical differentiation , Welfare Environment , Math. Appl. in Environmental Science , Mathematical Modeling and Industrial Mathematics , Operations Research/Decision Theory , Applications of Mathematics , Earth and Environmental Science
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