focus is on the incidence of the subsidy, i.e., we ask how much of the € 2,500 buyer subsidy is captured by the supply … subsidy amount. However, the incidence was heterogeneous across price segments. Subsidized buyers of cheap cars paid more than … comparable buyers who did not receive the subsidy, e.g. for cars of € 12,000 car dealers reaped about 8% of the scrappage prime …

with this contract type we follow the Limit Pricing theory and show that standard contract price could be used as an …