رقابت کیفیت استراتژیک و فرضیه پورتر

This paper offers new support for the Porter Hypothesis within the context of a quality competition framework. We use a duopoly model of vertical product differentiation in which two firms simultaneously choose to produce either a high (environmentally friendly) quality or low (standard) quality variant of a good, before engaging in price competition. In this simple setting, we show that a Nash equilibrium of the game featuring the low-quality good can be Pareto dominated by a different strategy profile, in which both firms opt in favour of the “green” product. Our analysis demonstrates that, in such a case, both firms stand to profit from the introduction of a rule penalizing any firm refusing to produce the environmentally friendly product. We also find that consumers themselves may benefit from such regulations. This is always the case when shifting from low quality to high-quality production brings about a cost-efficiency improvement.

Conventional economic thinking suggests that introducing more stringent environmental regulations always implies some private costs, since it displaces firms from their first-best and forces them into a more compromised position. Porter [18], [19] and [20] challenged this view, claiming that just the opposite might be true. His main argument was that environmental regulations can open up new investment opportunities, encourage companies to innovate and generate long-term gains that can partly or more than fully offset the costs of complying with them. This claim is now widely known as the Porter Hypothesis. Porter's view has received a skeptical response from economists working within the bounds of standard economic theory [16]. The idea that firms might systematically overlook opportunities to innovate or routinely undermine their own efforts to improve results is difficult to reconcile with the neoclassical view of the firm as a rational profit-maximizing entity. Since firms are always willing to implement changes that they see as beneficial, if producing environmentally friendly products were really as profit-enhancing as Porter claims it to be, then they would have moved in that direction on their own and would need no governmental prompting. In the face of such scepticism, other economists have recently depicted a number of scenarios for which the Porter result may hold. All of these studies point to the existence of some market failure that offers a field for environmental regulation, although different authors locate this failure at different levels in accordance with their specific interpretations of the Porter Hypothesis. Hart [10], for example, has shown that environmental regulations may help foster R&D activities and thus stimulate economic growth, while Simpson and Bradford [25] use an international trade model to show that tightening regulations may help shift profits from foreign to domestic firms because of the presence of international externalities. Similarly, Rothfels [23] demonstrates that enforced compliance with an environmental standard can push domestic firms to become leaders in the “green” market, thereby boosting their competitiveness vis-a-vis foreign rivals. Some intra-firm mechanisms through which environmental regulations can induce firms to make use of profit-enhancing innovations have also been studied. In this vein, Xepapadeas and de Zeeuw [27] conclude that more stringent environmental regulations can induce firms to downsize and modernize, while Popp [17] shows that firms tend to undertake risky R&D projects (many of which turn out to be ex post profitable) only when regulations are in place. Ambec and Barla [2] suggest that environmental regulations can help narrow the information gap between firms and managers. Finally, Mohr [14] and Greaker [9] discuss inter-firm mechanisms through which tougher environmental policies can push a group of firms to invest in new pollution abatement techniques. In their papers environmental policy can benefit competitiveness by solving a coordination failure among firms. The economic forces behind the results in [14] and [9] are the closest to ours in the literature. As we will see, the mechanism behind our Porter-type result also rests on a coordination failure, that is, on the disparity between individual firms’ incentives for adopting the new technology and the interests of the industry as a whole. All these studies, like most of the related literature concerning the effects of environmental standards in industries (and most of the theoretical contributions to the Porter Hypothesis), have tended to focus exclusively on the supply side of the market.1 By contrast, we suggest here that market demand—consumer preferences—may also favour the creation of a regulated environment in which firms stand to benefit from the sale of higher quality products at higher prices. We use a standard Bertrand duopoly model of vertical product differentiation in which two firms must simultaneously choose to produce either the environmentally friendly or the standard variant of a given product, and then engage in price competition. This model is similar to the one used by Gabszewick and Thisse [8] and Shaked and Sutton [24],2 except that here we treat environmental quality as a discrete variable rather than a continuous one. This would seem to be in keeping with our application context, since firms usually determine the environmental quality of their products through a series of discrete decisions (regarding whether to use conventional or recycled paper, fossil fuels or renewable energy, etc.). Since firms only have access to a discrete set of options and thus cannot be perfectly precise when adjusting their quality choices to those of their competitors, in many cases all of the firms in the market will set exactly the same quality standard at equilibrium.3 This feature of the model is a key determining factor to the emergence of a result in line with the Porter Hypothesis. The economic rationale behind our findings can be summarized as follows. Let us assume that the firms are producing the standard variant (low environmental quality) of the good and that a new technique or innovation has recently become available, allowing for the production of the new, more environmentally friendly variant. In this context, each firm must decide whether to adopt the new technology or to stick with the old one. Since environmentally friendly products typically cost more to produce than do their standard variants, in an unregulated market many individual firms would most likely want to avoid making the foray into “green” production. While consumers are often willing to pay more for a cleaner product [26], the higher production costs would still put these firms at a price disadvantage vis-a-vis their competitors, since the latter would then be free to capture a large portion of the market by offering cheaper, low-quality variants of the same good. Were this same case to unfold in the context of a regulated market in which all firms adopted the high-quality good, the result would be radically different. In this case, all of the firms would benefit from consumer willingness to pay higher prices and none would run the risk of being exploited by their competitors. This situation corresponds to a prisoner's dilemma: the Nash equilibrium of the game is Pareto dominated by a different strategy profile that is not an equilibrium. In the framework presented here, environmental regulation can motivate all firms to shift into “green” production in such a way that both the environment and the firms themselves are better off (hereafter denoted as a win–win situation).4 Economists have tended to support the Porter Hypothesis on the grounds that innovation sometimes leads to less costly production methods [20]. However, we suggest here that a win–win situation can arise even when the switch to environmentally friendly goods causes an increase in production costs. “Green” goods can be more expensive to produce, either because they require an initial investment in new materials and technologies or because they yield higher marginal costs. While the nature of the cost change is not crucial to obtain a win–win result, it is influential in determining to what extent regulation will ultimately have an impact on consumers. If firms incur higher marginal costs as a result of their decision to improve the environmental quality of their products, then prices will increase reflecting both the larger willingness to pay by consumers and the cost increment. Thus, in certain situations the improved quality of the environmentally friendly variant of a good does not compensate for the higher price to consumers which makes them be worse off. But if the shift to a higher quality product entails only fixed adoption costs, these costs have no effect on market prices (as they are sunk at the production stage). As a result, prices will only increase due to the higher quality of the new product and consumers will always benefit from any regulations supporting such a move. The ambiguous effect of the regulation on consumers is related to the literature on scarcity rents in environmental regulation [3] and [12], which show that environmental regulation can benefit firms by forcing them to act as if they were colluding (by restricting output and increasing price) at the expense of consumers. As Maloney and McCormick [12, p. 122] claim, Since regulation necessarily reduces output, either directly or indirectly by raising cost, market price of output increases. If entry is restricted, then these price increases can be profit enhancing. In our paper, the mechanism supporting a profit increase by firms also rests on a price increase. Nevertheless, environmental regulation not only serves to transfer surplus from consumers to producers, but it may also create new value by inducing firms to produce a greener good that is actually more preferred by consumers. This added value to consumers will partially (and in some cases more than fully) offset the surplus lost by the increased price. Our analysis, therefore, complements previous results on scarcity rents and shows that if consumers partially internalize the environmental externality through the value they assign to new greener products, then environmental regulations that benefit firms may also have a positive effect on consumers.

In this paper, we have studied a duopoly model of vertical product differentiation in which firms simultaneously set the environmental quality of a given product and then engage in price competition. The structure of this game can result in a classical prisoner's dilemma in that, at equilibrium, both firms produce the standard variant of the good but stand to benefit from a joint decision to produce the more environmentally friendly variant. In this context, the implementation of a “green” policy may enhance the environmental quality of the product while simultaneously increasing firms’ private profits. Our analysis has stressed that environmental regulation can not only make firms more profitable, but it can also increase consumer surplus. This occurs when producing the environmentally friendly product turns out to be more cost-efficient than producing the standard variant. As a matter of fact, this is always the case when the fixed adoption cost represents the only extra expense associated with a firm's shift from a standard to an environmentally friendly variant of a given product. Public intervention is clearly warranted in such cases, since such regulation could be seen as a device to unlock the economy from an inefficient lock-in situation. Nevertheless, some caution should still be exercised when giving policy recommendations, especially when adoption of the cleaner technology implies higher marginal costs. While our model suggests a different avenue by which regulations may benefit both firms and consumers, it does not attempt to model some other important aspects of Porter's argument. We abstract from international competition and the potential for domestic firms to benefit from environmental regulation at the expense of their international rivals. In addition, we require neither the flexible regulations nor innovation that, according to Porter, were crucial in creating an environment where regulations may benefit firms. While other authors have explored each of these features in the context of the Porter Hypothesis, our point is that consumer preferences for “green” products may also favour the creation of a regulated environment in which firms stand to benefit from the sale of higher quality products at higher prices. Finally, we have used a specific policy instrument to obtain these results: a penalty or lump-sum tax on firms producing the low-quality variant of the product in question. This penalty can solve a coordination failure by inducing firms to move into a new profit-improving equilibrium. This coordination effect can also be extended to encompass more complex forms of environmental regulation, such as effluent taxes.