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Reynaert, Mathias
and Sallee, James M.
(2021)
Who benefits when firms game corrective policies?
American Economic Journal: Economic Policy, vol. 13 (n° 1).
pp. 372-412.
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Abstract
Firms sometimes comply with externality-correcting policies by gaming the measure that determines policy. This harms buyers by eroding information, but it benefits them when cost savings are passed through into prices. We develop a model that highlights this tension and use it to analyze gaming of automobile carbon emission ratings in the EU. We document startling increases in gaming using novel data. We then analyze the effects of gaming in calibrated simulations. Over a wide range of parameters, we find that pass through substantially outweighs information distortions; on net, buyers benefit from gaming, even when they are fooled by it.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | February 2021 |
| Refereed: | Yes |
| Place of Publication: | Nashville |
| JEL Classification: | H2 - Taxation, Subsidies, and Revenue L5 - Regulation and Industrial Policy Q5 - Environmental Economics |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 25 Mar 2020 09:00 |
| Last Modified: | 19 Apr 2024 07:44 |
| OAI Identifier: | oai:tse-fr.eu:124149 |
| URI: | https://publications.ut-capitole.fr/id/eprint/34244 |
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Who benefits when firms game corrective policies? (deposited 09 Dec 2016 15:15)
- Who benefits when firms game corrective policies? (deposited 25 Mar 2020 09:00) [Currently Displayed]
