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on Economic Design |
| By: | Frikk Nesje; Robert C. Schmidt; Moritz A. Drupp |
| Abstract: | Pricing the emissions of greenhouse gases is widely considered as key to tackling climate change. While carbon pricing schemes are proliferating, the vast majority of emissions is not yet covered. Designing carbon pricing policies requires navigating crucial design choices, such as addressing distributional and competitiveness concerns. Here, we present recommendations from a global survey of more than 400 experts to inform key design issues for carbon pricing policies. We find that almost twice as many experts favor a carbon tax over a cap-and-trade scheme for unilateral carbon pricing, and three-quarters strongly recommend using border carbon adjustment to address competitiveness concerns. Recommendations on the usage of revenues from carbon pricing exhibit a substantial degree of heterogeneity. While transfers to particularly affected households and equal lump sum transfers are among the options most favored, these account for only around 40 percent of recommendations. In terms of country and observable expert characteristics, we find that experts from countries with a higher GDP per capita recommend equal lump sum transfers to households more often, and that the clear preference for carbon taxes only exists in richer countries. While economists recommend lump-sum transfers to households and reducing distortionary taxes more often, non-economic experts rather recommend using revenue for governmental spending, such as on environmental public goods or renewable energy subsidies. Overall, our results provide insights for science and policy to improve the design of unilateral carbon pricing policies. |
| Keywords: | Q540, H230 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10620&r=des |
| By: | Wenpin Tang; David D. Yao |
| Abstract: | We study a mechanism design problem in the blockchain proof-of-stake (PoS) protocol. Our main objective is to extend the transaction fee mechanism (TFM) recently proposed in Chung and Shi (SODA, p.3856-3899, 2023), so as to incorporate a long-run utility model for the miner into the burning second-price auction mechanism $\texttt{BSP}(\gamma)$ proposed in Chung and Shi (where $\gamma$ is a key parameter in the strict $\gamma$-utility model that is applied to both miners and users). First, we derive an explicit functional form for the long-run utility of the miner using a martingale approach, and reveal a critical discontinuity of the utility function, namely a small deviation from being truthful will yield a discrete jump (up or down) in the miner's utility. We show that because of this discontinuity the $\texttt{BSP}(\gamma)$ mechanism will fail a key desired property in TFM, $c$-side contract proofness ($c$-SCP). As a remedy, we introduce another parameter $\theta$, and propose a new $\texttt{BSP}(\theta)$ mechanism, and prove that it satisfies all three desired properties of TFM: user- and miner-incentive compatibility (UIC and MIC) as well as $c$-SCP, provided the parameter $\theta$ falls into a specific range, along with a proper tick size imposed on user bids. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2308.13881&r=des |
| By: | Aaron L. Bodoh-Creed; Brent R. Hickman; John A. List; Ian Muir; Gregory K. Sun |
| Abstract: | In this paper, we provide a suite of tools for empirical market design, including optimal nonlinear pricing in intensive-margin consumer demand, as well as a broad class of related adverse-selection models. Despite significant data limitations, we are able to derive informative bounds on demand under counterfactual price changes. These bounds arise because empirically plausible DGPs must respect the Law of Demand and the observed shift(s) in aggregate demand resulting from a known exogenous price change(s). These bounds facilitate robust policy prescriptions using rich, internal data sources similar to those available in many real-world applications. Our partial identification approach enables viable nonlinear pricing design while achieving robustness against worst-case deviations from baseline model assumptions. As a side benefit, our identification results also provide useful, novel insights into optimal experimental design for pricing RCTs. |
| JEL: | B4 C14 C51 C52 C93 D04 L1 L5 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31647&r=des |
| By: | Christine Baker-Smith; Kallie Clark; Sara Goldrick-Rab; Christel Perkins; Douglas A. Webber; Travis T. York |
| Abstract: | To improve college affordability and graduation rates, universities are increasingly allocating “completion grants” to students who are nearing the finish line but facing financial challenges. Using an experimental design and common program model across 11 broad-access public universities in ten states, we assessed the impact of a completion grants averaging $1, 200 distributed among more than 14, 000 students. We find that, despite university expectations that most students were near completion, only two-thirds of students eligible to receive a completion grant graduated within the academic year. Receiving a completion grant did not improve that rate. However, nearly all eligible students (95%) graduated within three years or were still working on their degrees. While completion grants are intended to enhance equity, we do not find evidence that they exerted positive impacts for marginalized groups as designed in this study. Moreover, while there was some program implementation variation across universities, it did not lead to differences in program impact. |
| Keywords: | higher education; affordability; graduation; financial aid; inequality |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:96646&r=des |
| By: | Crescioli, Tommaso (European Institute, London School of Economics and Political Science); Martelli, Angelo (European Institute, London School of Economics and Political Science) |
| Abstract: | Has the Euro created a more competitive market? Using a staggered difference-in-differences design we find that the Euro has increased firm-level market power between 23% and 30% after its adoption. This happens because deepening economic integration creates a stronger competitive environment where superstar firms acquire a dominant position. Consistently with this explanation, the Euro effect on market power is between 8% and 9% larger for tradable industries and between 10% and 17% larger for firms in the top 1% of the Eurozone pre-Euro productivity distribution. This rise in market power is mainly driven by changes in labor market competition that more than compensates for the increase in product market competition. Again counterintuitively, we also find that unions under certain conditions can increase the market power of superstar firms. This happens in the presence of cooperation-enhancing institutions that favor agreements between labor and capital and raise firms’ competitiveness by diminishing markdowns. |
| Keywords: | Competition, Single Currency, Superstar Firms, Market power, Labor Market Institutions |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bda:wpsmep:wp2022/8&r=des |