Prospective Welfare Analysis - Extending Willingness-to-Pay Assessment to Embrace Sustainability

28 Pages Posted: 30 Nov 2020 Last revised: 13 Jan 2022

See all articles by Roman Inderst

Roman Inderst

Goethe University Frankfurt

Stefan Thomas

University of Tuebingen - Faculty of Law

Multiple version iconThere are 2 versions of this paper

Date Written: September 25, 2020

Abstract

In this paper we outline how a future change in consumers’ willingness-to-pay can be accounted for in a consumer welfare effects analysis in antitrust. Key to our solution is the prediction of preferences of new consumers and changing preferences of existing consumers in the future. The dimension of time is inextricably linked with that of sustainability. Taking into account the welfare of future cohorts of consumers, concerns for sustainability can therefore be integrated into the consumer welfare paradigm to a greater extent. As we argue in this paper, it is expedient to consider changes in consumers’ willingness-to-pay, in particular if society undergoes profound changes in such preferences, e.g., caused by an increase in generally available information on environmental effects of consumption, and a rising societal awareness about how consumption can have irreversible impacts on the environment. We offer suggestions on how to conceptionalize and operationalize the projection of such consumers’ changing preferences in a “prospective welfare analysis”. This increases the scope of the consumer welfare paradigm and can help to solve conceptual issues regarding the integration of sustainability into antitrust enforcement while keeping consumer surplus as a quantitative gauge.

Keywords: Antitrust, Consumer Welfare, Sustainability

JEL Classification: A13, K21, K32

Suggested Citation

Inderst, Roman and Thomas, Stefan, Prospective Welfare Analysis - Extending Willingness-to-Pay Assessment to Embrace Sustainability (September 25, 2020). LawFin Working Paper No. 29, Available at SSRN: https://ssrn.com/abstract=3699693 or http://dx.doi.org/10.2139/ssrn.3699693

Roman Inderst

Goethe University Frankfurt ( email )

Theodor-W.-Adorno-Platz 3
Frankfurt am Main, Hessen 60629
Germany
+49 (69) 798-34601 (Phone)
+49 (69) 798-35000 (Fax)

HOME PAGE: http://www.wiwi.uni-frankfurt.de/en/departments/finance/lehrstuhl/prof-dr-roman-inderst/team

Stefan Thomas (Contact Author)

University of Tuebingen - Faculty of Law ( email )

Geschwister Scholl Platz
Tuebingen, 72074
Germany
0049-7071-29-72556 (Phone)
0049-7071-29-2105 (Fax)

HOME PAGE: http://www.jura.uni-tuebingen.de/professoren_und_dozenten/thomas

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