Analysis of regulatory compliance costs on gasoline markets
The Brattle Group has pioneered research into separating the direct costs of regulatory compliance from the impacts of the regulations on market dynamics and behavior. Local and regional fuel blend requirements, for example, can segment markets leading to an increased reliance on a reduced number of suppliers. The regulations may also impact the reliability of the remaining suppliers of the market. Our economic analyses have demonstrated how the effect of greater dependence on fewer and less reliable suppliers can lead to significantly greater price volatility and more numerous and severe supply disruptions.