Committed and non-committed policy regimes in a sequential mixed hotel duopoly

Ferreira, Flávio; Ferreira, Fernanda A.; Fernandes, Paula Odete

http://hdl.handle.net/10198/27615

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Authors

Ferreira, Flávio

Ferreira, Fernanda A.

Fernandes, Paula Odete

Abstract(s)

This paper highlights the effects of corporate social responsibility (CSR) on the strategic choice of pollution abatement and on the timing of the government’s commitment to the environmental tax policy, in the hotel industry. To do this, we consider a competition between one consumer-friendly hotel and one for-profit hotel, and two policy regimes (commitment and non-commitment), with two different timings of the government’s decision about environmental taxation. Hotels choose pollution abatement investments sequentially and outputs simultaneously. We show that with a high degree of consumer-friendliness, the committed environmental tax is lower than the non-committed one. We also show that although the environmental damage may be less under the non-committed policy regime, social welfare is always better under the committed policy regime. In addition, we examine the changes in the degree of CSR on the equilibrium results.

Keywords

Pollution abatement Commitment Environmental policy Consumer-friendly hotel

URI

http://hdl.handle.net/10198/27615

Citation

Ferreira, Flávio; Ferreira, F.A.; Fernandes, Paula O. (2022). Committed and non-committed policy regimes in a sequential mixed hotel duopoly. In 8th International Conference of the International Association of Cultural and Digital Tourism, IACuDiT 2021. Hydra Island. p. 91-103