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Can collusion promote sustainable consumption and production?

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  • Schinkel, Maarten Pieter
  • Spiegel, Yossi

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.

Suggested Citation

  • Schinkel, Maarten Pieter & Spiegel, Yossi, 2017. "Can collusion promote sustainable consumption and production?," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 371-398.
    • Handle: RePEc:eee:indorg:v:53:y:2017:i:c:p:371-398
    DOI: 10.1016/j.ijindorg.2016.04.012
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    References listed on IDEAS

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    More about this item

    Keywords

    Sustainability; Public interest; Collusion; Antitrust; Consumer surplus;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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