Price Regulation and Fraud—with Special Emphasis on Gasoline Retailing

García, Julio César Arteaga; Flores, Daniel

doi:10.1007/s11151-021-09840-z

Cited by 2 publications

(2 citation statements)

References 25 publications

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“…PCR promotes consumer surplus and hurts firm (Weisman, 2021). For energy industry, Arteaga and Flores (2022) recently considered PCR to gasoline retailing and found that PCR yields cheat and reduces welfare because of incomplete information. For health or pharmaceutical industry, Reisinger et al (2019) proposed PCR according to wealth level to promote innovation (price discrimination).…”

Section: Literature Reviewmentioning

confidence: 99%

Price cap regulation under duopoly

2022

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This article captures price cap regulation under duopoly with game theory approaches. First, price cap regulation reduces price difference, output difference, and price dispersion under both Cournot and Stackelberg competition. Second, price cap regulation weakens the advantages of both costs and first-mover. Third, price cap regulation reduces firms' profits while promotes consumer surplus. Finally, the relationship between the social welfare and price cap regulation is an inverse U-shape. Therefore, optimal price cap regulation exists.

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Section: Literature Reviewmentioning

confidence: 99%

Price cap regulation under duopoly

2022

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“…Indeed, these reputational and financial costs may not fully be offset by any possible gains from regulatory capture (Heyes, 2000). Nonetheless, anecdotal evidence suggests that firms sometimes engage in intentional noncompliance, such as price‐fixing (Arteaga and Flores, 2022; Connor, 2007) or violation of environmental standards (Schiermeier, 2015). Here, we propose that firms will decide whether to use intentional noncompliance (or not) by weighing the expected benefits from regulatory capture against the expected financial and social costs.…”

Section: Introductionmentioning

confidence: 99%

Negative Incentives and Regulatory Capture: Noncompliance with Price Ceilings on Essential Medicines in India

Benischke

Bhaskarabhatla

2022

J Management Studies

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Nonmarket scholars have paid limited attention to noncompliance as an alternative strategy to capture regulators; yet noncompliance is particularly consequential given its potentially significant negative externalities. We exploit rich data on price ceilings introduced in India in 2013 on 255 essential medicines to test whether noncompliance by other firms drives the focal firm's noncompliance decision. Our results indicate that noncompliance by other firms, particularly those with larger products in the market, is positively associated with a focal firm's noncompliance. The focal firm's scope and sales positively moderate this relationship. Overall, our study indicates that firms are more likely conclude that the potential benefits of regulatory capture using negative incentives outweigh the potential financial and social costs in the presence of a greater number of firms that are already noncompliant. As such, our study draws attention to negative incentives as an important yet largely overlooked nonmarket strategy.

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Price Regulation and Fraud—with Special Emphasis on Gasoline Retailing

Cited by 2 publications

References 25 publications

Price cap regulation under duopoly

Price cap regulation under duopoly

Negative Incentives and Regulatory Capture: Noncompliance with Price Ceilings on Essential Medicines in India

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