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It is well known that the double marginalization problem in the vertical relation can be eliminated by collusion, but it is undesirable because of the monopoly pricing outcome. This study addresses the role of downstream market competition under symbiotic production and demonstrates that incorporating different types of competition in product markets will partially eliminate inefficiency caused by...
This paper employs Cournot’s (1838) model of complementary goods to analyze the optimal emission taxation under joint and independent ownership with pollution. When the marginal damage is small (large), an emission taxation is unnecessary (necessary), because the quantity (environmental) distortion is more serious than the environmental (quantity) distortion. This finding has never been presented...
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