Browsing by Autor "Mathias Reynaert"

Filter results by typing the first few letters
Now showing 1 - 1 of 1
  • Thumbnail Image
    Item type: Item ,
    Colluding Against Environmental Regulation
    (Oxford University Press, 2025) Jorge Alé‐Chilet; Cuicui Chen; Jing Li; Mathias Reynaert
    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.