Can collusion promote sustainable consumption and production?

Yossi Spiegel and Maarten Schinkel

No 11102, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Several competition authorities consider the exemption of horizontal agreements among firms from antitrust liability if the agreements sufficiently promote public interest objectives such as sustainable consumption and production. We show that when consumers value sustainable products and firms choose investments in sustainability before choosing output or prices, coordination of output choices or prices boosts investments in sustainability and may even enhance consumer surplus when products are sufficiently close substitutes and the marginal cost of investment in sustainability is relatively low. By contrast, coordination of investments in sustainability leads to lower investments and harms consumers.

Keywords: Collusion; Antitrust; Sustainability; Consumer surplus; Public interest (search for similar items in EconPapers)
JEL-codes: K21 L13 L40 Q01 (search for similar items in EconPapers)
Date: 2016-02
New Economics Papers: this item is included in nep-com, nep-env and nep-ind
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Citations: View citations in EconPapers (2)

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