| dc.description.abstract | Abstract
The purpose of this paper is to delve into the economic decision-making in mixed oligopolistic markets. We focus on how firms decide on production and pollution control under increasing marginal cost conditions in mixed oligopolistic markets, and how the government sets an optimal pollution tax under such circumstances. In contrast, most prior research has been based on the assumption of fixed marginal costs. In order to be more closely aligned with real economic phenomena, we consider situations where marginal costs increase with output, and observe whether firms′ production and pollution control decisions change under such circumstances.Our research findings indicate that in a mixed duopoly market with increasing marginal costs, the government sets a higher pollution tax when the efficiency of pollution control is higher. At the same time, when the increasing rate of marginal environmental costs rises, the government also sets a higher pollution tax. In addition, we observed that the results under these two market conditions are actually the same as those in a market with only two private firms. In a mixed oligopoly market with two private firms, the government sets a higher pollution tax as the rate of increase in marginal cost and marginal environmental damage rises. When the efficiency of pollution control is higher, the government also sets a higher pollution tax.We then examined a market with one public firm and multiple private firms. We found results different from previous literature; under fixed marginal costs, the number of private firms does not affect the government′s setting of pollution taxes. However, our study found that the more private firms there are, the lower the pollution tax set by the government. Our research findings provide a deeper understanding of mixed oligopoly markets, especially considering the case where marginal costs increase with output. In addition, our results also contribute to understanding how the government sets environmental policies, and how these policies affect the behavior of market participants. | en_US |