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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

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Tax Differentials and the Segmentation of Networks of Cooperation in Oligopoly

Hassan Benchekroun1 / Denis Claude2

1Department of Economics, CIREQ, McGill University,

2HEC Montreal & Gerad,

Citation Information: The B.E. Journal of Theoretical Economics. Volume 7, Issue 1, ISSN (Online) 1935-1704, DOI: 10.2202/1935-1704.1316, July 2007

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This paper studies the effects of uncoordinated environmental tax policies on firms' incentives to form bilateral R&D collaborations. It is shown that the complete network is pair-wise stable for small differences in the taxation of environmental emissions. Larger tax differentials may induce firms to abandon all their international collaborations.

Keywords: uncoordinated environmental actions; taxation; networks; R&D

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