Optimal policy and network effects for the deployment of zero emission vehicles

Guy Meunier and Jean-Pierre Ponssard

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Abstract: We analyze the impact of indirect network effects in the deployment of zero emission vehicles in a static partial equilibrium model. In most theoretical analyses, direct and indirect effects are conflated, and relatively few authors have explicitly considered indirect network effects. We also introduce the market power of vehicle producers and scale effects in the production function. The model exhibits a multiplicity of local social critical points and market equilibria, suggesting a possibility of lock-in. The optimal two subsidies for vehicles and stations are derived so that the Pareto dominating market equilibrium would coincide with the social optimum. Configurations associated with different values of the parameters are explored to revisit the policy issues at various stages of deployment of hydrogen and battery electric vehicles.

Keywords: Network effects; Technology deployment; Lock-in; Optimal policy (search for similar items in EconPapers)
Date: 2020-07
Note: View the original document on HAL open archive server: https://hal.science/hal-03348070v1
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Citations: View citations in EconPapers (14)

Published in European Economic Review, 2020, 126, pp.103449. ⟨10.1016/j.euroecorev.2020.103449⟩

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Related works:
Journal Article: Optimal policy and network effects for the deployment of zero emission vehicles (2020)
Working Paper: Optimal Policy and Network Effects for the Deployment of Zero Emission Vehicles (2018)
Working Paper: Optimal Policy and Network Effects for the Deployment of Zero Emission Vehicles * (2018)
Working Paper: Optimal Policy and Network Effects for the Deployment of Zero Emission Vehicles * (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03348070

DOI: 10.1016/j.euroecorev.2020.103449

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