Wednesday, March 4, 2009

When Adding a Fuel Efficient Car Increases an Automaker’s CAFÉ Penalty

Authors: Tenn and Yun FTC (2004)
Abstract: We derive the conditions that cause an automaker’s CAFÉ fine to increase when it sells an additional, fuel efficient car. Raising CAFÉ standards would broaden the range of fuel economies that produce this effect.
Relevence:Mild
Method: They model CAFE fine structure to find the marginal cost of adding a fuel efficient car to a fleet

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