Competition Policy Evaluation through Damage Estimation in Fuel Retail Cartel

Cuiabano, Simone (2017) Competition Policy Evaluation through Damage Estimation in Fuel Retail Cartel. TSE Working Paper, n. 17-847, Toulouse

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Official URL: http://tse-fr.eu/pub/32100

Abstract

I estimate the fuel retailer cartel damages in the south of Brazil using reduced and structural forms for supply and demand. Brazilian Competition Authority (CADE) documents help to characterize the ethanol and gasoline retailers involved in the collusion. The objective is to evaluate competition policy by comparing the amount of estimated damages with the amount of applied fines. This paper also adds an important result to gasoline substitution, as data shows that ethanol is perceived as a perfect substitute and it is price inelastic. Results show an overcharge of 4.6% to 6.6% in the gasoline market and up to 12% in the ethanol market during collusion. Fines should consider the deterrence effect and, giving the low probability of detection, CADE’s applied fines seemed to be in line with this objective.

Item Type: Monograph (Working Paper)
Language: English
Date: September 2017
Place of Publication: Toulouse
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Apr 2018 07:40
Last Modified: 17 Apr 2018 07:40
OAI ID: oai:tse-fr.eu:32100
URI: http://publications.ut-capitole.fr/id/eprint/25705

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