Template-type: ReDIF-Paper 1.0
Author-Name: Makoto Kakinaka
Author-Name-First: Makoto
Author-Name-Last: Kakinaka
Author-Email: kakinaka@iuj.ac.jp
Author-Workplace-Name: International University of University
Author-Workplace-Homepage: http://www.iuj.ac.jp/
Author-Name: Koji Kotani
Author-Name-First: Koji
Author-Name-Last: Kotani
Author-Workplace-Name: Yokohama National University
Author-Workplace-Homepage: http://www.ynu.ac.jp/
Title: Promotion of Eco-Products and Environmental Regulation with Learning-by-Doing
Abstract: This paper studies a dynamic model of eco-product planning, where an eco-product supplied by a single producer is differentiated from a conventional product generating negative externalities, and the production technology of the eco-product is characterized by learning-by-doing. The result states that the learning effect causes the eco-product to be more promoted and brings about more favorable outcomes on social welfare. This study also examines how the environmental regulation on the conventional product, associated with a price distortion, affects the promotion of the eco-product, consumer surplus, the single producer's profit, and negative externalities. It is shown that the impact of the environmental regulation is similar to that of a rise in the learning effect. Furthermore, whether or not the environmental regulation should be adopted is highly dependent on the degree of the learning effect. In the presence of a large learning potential, the environmental regulation may not only promote the eco-product effectively but also improve social welfare through intensifying the learning effect.
Classification-JEL: Q55, Q58
Length: 41 pages
Creation-Date: 2006-03
Number: EMS_2006_07
File-URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2006_07.pdf
File-Format: Application/pdf
File-Function: First version, 2006
File-Size: 515KB
Keywords: eco-product, environmental regulation, product differentiation, learning-by-doing, optimal control
Handle: RePEc:iuj:wpaper:EMS_2006_07