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This paper investigates the impacts of two environmental policies: pollution abatement subsidy and emission tax, on a three-tier supply chain, where the manufacturer distributes via multiple competitive retailers and invests in a pollution abatement technology in manufacturing. The government pursues social welfare maximization, while the manufacturer and retailers are profit driven. We find that the subsidy policy offers the manufacturer greater incentives to abate pollution and yields higher profits for channel members.
Frank Safayeni
Selcuk Onay
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University of Waterloo
200 University Ave W, Waterloo, ON N2L 3G1
Phone: (519) 888-4567
Staff and Faculty Directory
Contact the Department of Management Sciences
The University of Waterloo acknowledges that much of our work takes place on the traditional territory of the Neutral, Anishinaabeg and Haudenosaunee peoples. Our main campus is situated on the Haldimand Tract, the land granted to the Six Nations that includes six miles on each side of the Grand River. Our active work toward reconciliation takes place across our campuses through research, learning, teaching, and community building, and is centralized within our Office of Indigenous Relations.