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Ale-Chilet, Jorge, Chen, Cuicui, Li, Jing and Reynaert, Mathias
(2025)
Colluding against Environmental Regulation.
Review of Economic Studies.
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Abstract
We study collusion among firms against imperfectly monitored environmental regulation. Firms increase variable profits by violating regulation and reduce expected noncompliance penalties by violating jointly. We consider a case of three German automakers colluding to reduce the effectiveness of emissions control technology. By estimating a structural model of the European automobile industry from 2007 to 2018, we find that collusion lowers expected noncompliance penalties substantially and increases buyer and producer surplus. Due to increased pollution, welfare decreases by €1.57–5.57 billion. We show how environmental policy design and antitrust play complementary roles in preventing noncompliance.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | April 2025 |
| Refereed: | Yes |
| Additional Information: | En attente de publication (27-11-2024 CV) |
| Uncontrolled Keywords: | collusion, regulation, pollution, automobile market, noncompliance |
| JEL Classification: | L5 - Regulation and Industrial Policy L6 - Industry Studies - Manufacturing Q5 - Environmental Economics L4 - Antitrust Issues and Policies |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 22 Jan 2026 08:02 |
| Last Modified: | 22 Jan 2026 08:02 |
| OAI Identifier: | oai:tse-fr.eu:129916 |
| URI: | https://publications.ut-capitole.fr/id/eprint/49834 |
Available Versions of this Item
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Colluding against environmental regulation. (deposited 15 Apr 2021 10:03)
- Colluding against Environmental Regulation. (deposited 22 Jan 2026 08:02) [Currently Displayed]
