Project Title & Description
Differentiating Passenger Vehicles by Fuel Economy:
Strategic Incentives and the Cost Effectiveness of Tradable CAFE Standards
SMALL GRANT - This study will address the impact of imperfect competition on vehicle air pollution standards. The study will develop analytical foundations for incorporating price discrimination and quality choice into a typical model of Bertrand competition. An existing numerical model of the market for new vehicle sales will be modified to conduct policy simulations. The welfare and distributional effects of alternative fuel economy regulations will be compared.