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on Regulation |
| By: | Elsas, Ralf; Sabine, Mielert |
| Keywords: | Credit Ratings; Validation; Rating Regulation |
| JEL: | G14 G28 G33 |
| Date: | 2009–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:msmdpa:10979&r=reg |
| By: | Baldursson, Fridrik M. (Reykjavik University); von der Fehr, Nils-Henrik M. (Dept. of Economics, University of Oslo) |
| Abstract: | We consider an industry with firms that produce a final good emitting pollution to different degree as a side effect. Pollution is regulated by a tradable quota system where some quotas may have been allocated at the outset, i.e. before the quota market is opened. We study how volatility in quota price affects firm behaviour, taking into account the impact of quota price on final-good price. The impact on the individual firm differs depending on how polluting it is - whether it is ‘clean’ or ‘dirty’- and whether it has been allocated quotas at the outset. In the absence of long-term or forward contracting, the optimal initial quota allocation turns out to resemble a grandfathering regime: clean firms are allocated no quotas - dirty firms are allocated quotas for a part of their emissions.With forward contracts and in the absence of wealth effects initial quota allocation has no effect on firm behaviour. |
| Keywords: | regulation; effluent taxes; tradable quotas; uncertainty; risk aversion; environmental management |
| JEL: | D81 H23 L51 Q28 Q38 |
| Date: | 2009–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2009_011&r=reg |
| By: | Atsushi Tsuneki; |
| Abstract: | It has been shown by Polinsky and Shavell that the strict liability rule is socially superior to the negligence liability rule when firms are injurers, strangers are victims, and accidents have a unilateral nature if prefect competition among firms prevails. This article considers the problem of socially efficient liability rules in a market where natural monopoly prevails due to decreasing average cost. We especially consider a quasi-competitive case where average cost pricing is achieved in a naturally monopolized market either through well-organized government regulation or the weak invisible hands of contestability. In contrast to the perfectly competitive economy, the present article shows that in most cases, the negligence regime is socially more desirable than the strict liability regime from the view point of economic efficiency. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0753&r=reg |
| By: | Nicholas Economides (Stern School of Business, NYU); Ioannis Lianos (Faculty of Laws, University College London) |
| Abstract: | The Microsoft cases in the United States and in Europe have been influential in determining the contours of the substantive liability standards for dominant firms in US antitrust law and in EC Competition law. The competition law remedies that were adopted, following the finding of liability, seem, however, to constitute the main measure for the “success” of the case(s). An important disagreement exists between those arguing that the remedies put in place failed to address the roots of the competition law violation identified in the liability decision and others who advance the view that the remedies were far-reaching and that their alleged failure demonstrates the weakness of the liability claim. This study evaluates these claims by examining the variety of remedies that were finally imposed in the European Microsoft cases, from a comparative perspective. The study begins with a discussion of the roots of the Microsoft issues in Europe and the consequent choice of a remedial approach by the Commission and the Court. It then explores the effectiveness of the remedies in achieving the aims that were set. The non-consideration of the structural remedy in the European case and the pros and cons of developing such a remedy in the future are briefly discussed before more emphasis is put on alternative remedies (competition and non-competition law ones) that have been suggested in the literature. The study concludes by discussing the fit between the remedy and the theory of consumer harm that led to the finding of liability and questions a total dissociation between the two. We believe that it is important to think seriously about potential remedies before litigation begins. However, we do not require an ex ante identification of an appropriate remedy by the plaintiffs, since this could lead to underenforcement or overenforcement. |
| Keywords: | antitrust, remedies, Microsoft, complementarity, innovation, efficiency, monopoly, oligopoly, media player, interoperability, Internet browser |
| JEL: | K21 L41 L42 L12 L86 L63 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0905&r=reg |
| By: | Stefan Voigt (MACIE (Philipps University Marburg), Barfüßertor 2, 35032 Marburg, Germany; CESifo; ICER, Torino) |
| Abstract: | I argue that the rule of law consists of many dimensions and that much information is lost when variables proxying for these dimensions are simply aggregated. I draw on the most important innovations from various legal traditions to propose a concept of the rule of law likely to find general support. To make the concept measurable, an ideal approach is contrasted with a pragmatic one. The pragmatic approach consists of eight different dimensions. I show that the bivariate correlations between them are usually very low, evidence that more fine-grained indicators of the rule of law, rather than a single hard-to-interpret one, are necessary for its measurement. The paper presents a list of desirable variables that could improve the measurement of various aspects of the rule of law. |
| Keywords: | Rule of Law, Institutions, Governance, Measurement, Formal vs. Informal Institutions |
| JEL: | B41 H11 K00 O17 O43 O57 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:200938&r=reg |
| By: | Yannis Bakos (Stern School of Business, New York University); Florencia Marotta-Wurgler (School of Law, New York University); David R. Trossen (Boalt School of Law, University of California at Berkeley) |
| Abstract: | A cornerstone of the law and economics approach to standard form contracts is the Òinformed minorityÓ hypothesis: in competitive markets, a minority of term-conscious buyers is enough to discipline sellers from offering unfavorable boilerplate terms. The informed minority argument is widely invoked to limit intervention in consumer transactions, but there has been little empirical investigation of its validity. We track the Internet browsing behavior of 45,091 households with respect to 66 online software companies to study the extent to which potential buyers access the standard form contract associated with software purchases, the end user license agreement. We find that only one or two out of every thousand retail software shoppers chooses to access the license agreement, and those that do spend too little time, on average, to have read more than a small portion of the license text. The results cast doubt on the relevance of the informed minority mechanism in a specific market where it has been invoked by both theorists and courts and, to the extent that comparison shopping online is relatively cheap and easy, suggest limits to the mechanism more generally. |
| Keywords: | online contracts, clickwrap, informed minority, ecommerce law, contracts law, standard form contracts |
| JEL: | D83 K12 L14 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0904&r=reg |
| By: | Dimitri B. Papadimitriou; Greg Hannsgen |
| Abstract: | A wave of revisionist work claims that "anti-competitive" New Deal legislation such as the National Industrial Recovery Act (NIRA) and the National Labor Relations Act (NLRA) greatly slowed the recovery from the Depression; in this new public policy brief, President Dimitri B. Papadimitriou and Research Scholar Greg Hannsgen review these claims in light of current policy debates and cast into doubt the argument that NIRA and NLRA significantly prolonged or worsened the Depression. Moreover, Social Security, federal deposit insurance, and other New Deal programs helped usher in an era of relative prosperity following World War II. When it comes to combating the current recession and employment slump, it is the successful experience with relief and public works, and not the repercussions of pro-union and regulatory legislation, that offer the most relevant and helpful lessons. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_104&r=reg |
| By: | Francisco Martínez-Sánchez (Universidad de Alicante) |
| Abstract: | In this paper we analyze firms' ability to tacitly collude on pricesin an infinitely repeated duopoly game of vertical productdifferentiation. We show that firms collude if and only if their discountfactor is high enough, i.e. if they value future profits sufficiently. We alsoshow that a lower cost of copying facilitates collusion but that a higherquality of the copy hinders collusion. Thus, the overall effect of thesenew characteristics of copies made by consumers is ambiguous. |
| Keywords: | Collusion, competition, piracy, consumers, cost of copying, |
| JEL: | D40 K42 L13 L40 O34 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2009-20&r=reg |
| By: | Kamgna, Severin Yves; Tinang, Nzesseu Jules; Tsombou, Kinfak Christian |
| Abstract: | The main purpose of this paper is to determine the macro-prudential indicators of financial stability that can be used for supervising the banking system in the CEMAC zone. Going by a set of indicators drawn from similar works on macro-prudential supervision, and, more specifically, aggregate microeconomic variables of the banking sector, macroeconomic variables and combinations of the two, we were able to identify those that are relevant in analysing an imminent deterioration of the banking system in the subregion. At the end of this study, it was realised that claims on the private sector, foreign direct investments and the combination of exports and credits to the private sector, increase the risk of degradation of the banking system, while this risk is reduced by an increase in the exchange rate, increase in the internal resources of the banking system and inflation rate. The regulator should therefore bear this set of indicators in mind in order to facilitate a quick response to offset any potential banking crisis in the CEMAC region. |
| Keywords: | Banking System; Macro-Prudential Indicators; Weakness; Degradation; Monetary Policy; CEMAC; BEAC; Africa; |
| JEL: | C13 E58 C12 G28 G21 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17095&r=reg |