Issues in Compliance with
Transportation Policy
Discussion by Ashley Langer
University of Arizona
Overview of Xie, Lin, and Greene
Firms choose vehicle fuel economy
(all other vehicle attributes fixed).
Prices set with fixed markups.
Consumers choose vehicles.
Outputs: Compliance (or not)
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Overview of Miravete, Moral, and Thurk
Firms independently choose vehicle characteristics
(subject to complying with regulations).
Firms observe rivals’ product choices and shocks
(e.g. steel/gas prices).
Firms choose profit-maximizing prices.
Consumers choose vehicles.
Outputs: sales, firm profits, consumer surplus, equivalent tariff
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Some Substantive Suggestions
Xie, Lin, and Greene:
Compliance is possible, but at what cost? How do profits and
consumer surplus change?
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Some Substantive Suggestions
Miravete, Moral, and Thurk:
Environmental benefits of regulation matter. The fundamental tradeoff here is
between the protection of domestic firms and environmental degradation.
Is this paper really about how countries choose policies?
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Broader Comments (e.g. Future Research?)
Both papers strongly suggest that policy is not made in a vacuum.
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Does Policy Drive Technology or Does Technology Drive Policy?
To what extent is environmental policy enabled by what’s possible
rather than redefining what’s possible?
Does technology “lead” policy?
For all of the discussion of “transformative technologies” under what
scenarios can policy really enable their discover and adoption?
Can policy “lead” technology?
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