Peter Michaelis, Thomas Ziesemer
Policy Diffusion in a simple Stackelberg Game
Abstract:
Strategic environmental policy games are usually based on simultaneous
decision making and reach the conclusion that the policy choices are
strategic substitutes. Empirical evidence, however, shows that the
introduction of a regulatory instrument usually follows a consecutive
pattern that is best described as policy diffusion. To introduce policy
diffusion into to a strategic environmental policy game we transform
the typical model setup into a Stackelberg game in which we analyze the
policy decisions of two governments when one can commit to its choice.
We find that the well-known trade-off between rent-seeking and the
internalisation of negative externalities from pollution is mitigated
when policy diffusion takes place.
JEL: F18, D62, Q58
Paper:
Paper available as pdf-file.
Beitrag Nr. 314, Volkswirtschaftliche Diskussionsreihe, Institut
für
Volkswirtschaftslehre der Universität Augsburg
Contact:
Peter
Michaelis, University of Augsburg, Department of Economics,
D-86135
Augsburg,
Germany, phone +49-821-598-4057, fax +49-821-598-4217,
email: peter.michaelis@wiwi.uni-augsburg.de
Thomas
Ziesemer, University of Augsburg, Department of Economics,
D-86135
Augsburg,
Germany, phone +49-821-598-4061, fax +49-821-598-4217,
email: thomas.ziesemer@wiwi.uni-augsburg.de
Bo., 06.12.2010