When Adding a Fuel Efficient Car Increases an Automaker's Cafe Penalty
10 Pages Posted: 18 Feb 2004
Date Written: February 13, 2004
Abstract
We derive the conditions that cause an automaker's Corporate Average Fuel Economy (CAFE) fine to increase when it sells an additional, fuel efficient car. Raising the CAFE standards would broaden the range of fuel economies that produce this effect.
Keywords: Corporate average fuel economy, CAFE, fuel efficiency, automobile regulation
JEL Classification: K32, L51, L62
Suggested Citation: Suggested Citation
Tenn, Steven and Yun, John M., When Adding a Fuel Efficient Car Increases an Automaker's Cafe Penalty (February 13, 2004). Available at SSRN: https://ssrn.com/abstract=503242 or http://dx.doi.org/10.2139/ssrn.503242
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