| By: |
Kriechel,Ben;
Ziesemer,Thomas (MERIT) |
| Abstract: |
The Porter Hypothesis postulates that the costs of compliance with
environmental standards may be offset by adoption of innovations they trigger.
We model this hypothesis using a game of timing of technology adoption. We
show that times of adoption are earlier the higher the non-adoption tax. The
environmental tax turns the preemption game with low profits into a game with
credible precommitment yielding high profits (pro-Porter). If there is a
precommitment game without environmental taxes, the introduction of a tax
leads to lower profits (anti-Porter). |
| Keywords: |
economics of technology ; |
| Date: |
2005 |
| URL: |
https://d.repec.org/n?u=RePEc:dgr:umamer:2005008 |