Strategic responses to automobile emissions control: A game-theoretic analysis

Abstract

This paper examines the dynamics of standard-setting regulation under technological uncertainty and asymmetric information about technological capability. A two-period model which allows fully strategic action is developed and applied to the regulation of automobile emissions, a situation in which standards have been used to “force” innovation. It is found that the initial level of R & D activity caused by regulation increases with the intrinsic technical capability of industry. This result done not depend on marginal productivities of research that favor high-capability types and implies that a poor-capability industry will not attempt to compensate for its inability to innovate with increased research activity. It is also found that the regulator's ability to induce investment is greater when R & D is likely to be unsuccessful.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 53 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.