SECOND-BEST WORLDS

4.13

Reflection: Compare the results – same policy, different outcome?

In the previous model exercise, you were tasked to analyse how the number of firms, and thereby the level of competition in the market, impacts the effect of your environmental policy.

Do the number of firms have an impact on the effect of your policy choice? And if so, what does this mean for policy design in the real world?

We suggest you make a note of your observations.

Exercise: Steering firms – from one to many
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Oligopoly model: the mathematics
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