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on Regulation |
| By: | A.M. Oosthuizen; R. Inglesi-Lotz; G.A. Thopil |
| Abstract: | The centrality of electricity to everyday life is indisputable, and the price thereof can have significant implications. Literature is inconclusive over the effect of the renewable energy share in the energy mix on retail electricity price as country-specific regulatory policy has a significant impact on retail electricity prices. The purpose of this paper is to determine the effect of the increasing renewable electricity share on retail electricity prices for 34-OECD countries, considering the change in market structure for 23 EU countries. The results show that the influence of the renewable energy share in the energy mix to retail electricity prices is positive and statistically significant. Increasing renewable sources is inescapable in reaching SDG7, while increased awareness of true price signals should prompt private investment while phasing out support schemes in the long run. A sound regulatory framework is required to account for renewable intermittency as well as effective supply and demand matching. The positive impact on electricity prices should not deter policymakers from promoting renewable energy as the effect is marginal and is expected to decline in coming years, improving energy security. The benefits of employing renewables far outweigh the environmental cost. |
| Keywords: | renewable energy; electricity prices; OECD; energy dependence |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:797&r=all |
| By: | Ostfeld, R.; Reiner, D. |
| Abstract: | Scotland offers a case study of a country with significant fossil energy resources that has recently moved to rapidly decarbonize its economy and deploy renewable energy sources. We review the key policies that have facilitated a 47% reduction in greenhouse gas emissions from 1990 levels and almost 75% of Scottish electricity being produced from renewable energy. Public views on climate policy, renewable energy, and low-carbon technologies are explored using focus groups we conducted in Aberdeen, Peterhead, and Edinburgh and citizens’ juries held in Aberdeen and Edinburgh. The deliberative processes reveal strong public support for continued diversification of Scotland’s energy portfolio to include more renewable energy sources, particularly at the local level. We also found support for a greater role for state-led involvement in the energy sector. Pro-renewables sentiments and skepticism of industry pervade even in Aberdeen, the main UK hub for oil and gas exploration, alongside support for further exploration of low-carbon technologies such as carbon capture and storage (CCS). Although Peterhead stood to benefit from a major CCS project, there was little awareness of the proposed project among residents nor its cancellation. Finally, we argue deliberative processes can help both policy-makers and developers gauge where they can (and cannot) expect support. |
| Keywords: | Citizens' jury, focus groups, energy transition, climate policy, renewable energy, low-carbon technologies, Scotland, carbon capture and storage |
| JEL: | Q42 Q54 Q58 |
| Date: | 2019–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1987&r=all |
| By: | Vladimir Pavlov (The Wharton School, University of Pennsylvania, 3730 Walnut St, Philadelphia, PA 19104 USA); Ron Berman (The Wharton School, University of Pennsylvania, 3730 Walnut St, Philadelphia, PA 19104 USA) |
| Abstract: | Should a peer-to-peer platform set prices for the products on the platform, or should it let sellers set their own prices while providing price recommendations? Centralized prices allow a platform to use demand information it observes, while price recommendations allow for competition in which sellers set prices based on their private information. On sharing economy platforms, for example, we observe a myriad of such pricing regimes. We investigate the implications of each pricing regime for the profits of platforms, buyers and sellers. When a platform recommends prices, it effectively plays the role of a sender in a multi-receiver cheap-talk game. platforms are not always better off by centralizing pricing. When the variance of aggregate demand is large, price recommendations can be sustained in equilibrium and are often more profitable for the platform. Otherwise, a price recommendation is not credible. High (low) quality sellers have a stronger (weaker) preference for centralized pricing than the platform. Buyers, in contrast, receive lower surplus when the platform provides price recommendations, and prefer centralized pricing or competition without price recommendations. The results provide tools for platform designers and policy makers to assess the impact of different pricing regimes in markets with platforms. Although price recommendations might seem to encourage lower prices among sellers through increased competition, this is not always the case. |
| Keywords: | two-sided markets; peer-to-peer platforms; sharing economy; price recommendations; cheap talk |
| JEL: | D21 L13 L16 L22 M31 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:19-10&r=all |
| By: | Ryan Hawthrone; Lukasz Grzybowksi |
| Abstract: | We test for the distributional effects of regulation and entry in the mobile telecommunications sector in a highly unequal country, South Africa. Using six waves of a consumer survey of over 134,000 individuals between 2009-2014, we estimate a discrete-choice model allowing for individual-specific price-responsiveness and preferences for network operators. Next, we use a demand and supply equilibrium framework to simulate prices and the distribution of welfare without entry and mobile termination rate regulation. We find that regulation benefits consumers significantly more than entry does, and that high-income consumers and city-dwellers benefit more in terms of increased consumer surplus. |
| Keywords: | Mobile telecommunications, Competition; Entry, Discrete choice, inequality |
| JEL: | L13 L40 L50 L96 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:791&r=all |
| By: | Andrey Tkachenko (National Research University Higher School of Economics, Russian Federation and Bocconi University); Paola Valbonesi (Department of Economics and Management, University of Padova and National Research University Higher School of Economics, Russian Federation); Elena Shadrina (National Research University Higher School of Economics, Russian Federation); Gegam Shagbazian (Department of Economics and Management, University of Padova) |
| Abstract: | Government support to small business enterprises (SBEs) through set-aside (SA) public procurement auctions is a common practice. The effect of the SA mechanism is, however, ambiguous. On the one hand, SA auctions can attract more SBEs to compete; on the other hand, SA auctions restrict the entry of—possibly—more cost-efficient large firms. We investigate SA auctions’ effect by exploiting an original Russian database on public procurement e-auctions for granulated sugar (a largely homogeneous good) in the period 2011-2013. To identify the causal effect of SA auctions, we overcome two endogeneity issues: procurers’ choice of SA format and firms’ decision to bid. In an empirical setting where confounding elements are minimized, we found that SA auctions’ effect largely depends on both the reserve price value and the level of competition. We found that there exists an optimal interval for the reserve price where SA auctions record lower procurement prices, as compared to non-SA auctions. |
| Keywords: | affirmative action, preferential treatment, public procurement, set-aside auctions, e-auctions, small businesses enterprises (SBEs), small and medium-sized enterprises (SMEs) |
| JEL: | D44 H11 H57 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0240&r=all |
| By: | Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Department of Economics, School of Business, Economics and Law, Göteborg University); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Households’ demand for electricity continues to increase. This trend per se should indicate increased disutility from power outages. On the other hand, batteries and other back-up systems have been improved and the frequency and duration of outages have been reduced in many countries. By comparing the results from two stated preference studies on Swedish households’ willingness to pay to avoid power outages in 2004 and 2017, we investigate whether the willingness to pay has changed. The willingness to pay is assessed for power outages of different durations, and whether it is planned or unplanned. We find three main differences: i) The proportion of households stating zero willingness to pay to avoid power outages decreased significantly from 2004 to 2017 and ii) the overall WTP was considerably higher in 2017 than in 2014, but iii) the WTP for duration of an outage has decreased. These results have implications for how regulators incentivize and regulate electricity suppliers since they suggest that a reliable supply of electricity is of greater importance now than what earlier studies have suggested. |
| Keywords: | Power outage; stated preferences; Sweden |
| JEL: | D12 Q40 Q41 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0776&r=all |
| By: | Gretschko, Vitali; Pollrich, Martin |
| Abstract: | We analyze the problem of a buyer who purchases a long-term project from one of several suppliers. A changing state of the world influences the costs of the suppliers. Complete contracts conditioning on all future realizations of the state are infeasible. We show that contractual incompleteness comes without a cost. The buyer achieves the same surplus with complete and incomplete contracts. The key insight is that the allocation prescribed by optimal complete contracts is sequentially optimal with incomplete contracts if the buyer does not receive too much information ex-interim. We show that the English auction restricts the information optimally. |
| Keywords: | incomplete contracts,repeated relationships,procurement,commitment |
| JEL: | D44 D82 H57 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19040&r=all |
| By: | Mancusi, Maria Luisa; Conti, Chiara; Sanna-Randaccio, Francesca; Sestini, Roberta |
| Abstract: | This paper investigates the fragmentation of the EU innovation system in the field of renewable energy sources (RES) by estimating the intensity and direction of knowledge spillovers over the years 1985-2010. We modify the original double exponential knowledge diffusion model proposed by Caballero and Jaffe (1993) to provide information on the degree of integration of EU countries’ RES knowledge bases and to assess how citation patterns changed over time. We show that EU RES inventors have increasingly built “on the shoulders of the other EU giants”, intensifying their citations to other member countries and decreasing those to domestic inventors. Furthermore, the EU strengthened its position as source of RES knowledge for the US. Finally, we show that this pattern is peculiar to RES, with other traditional (i.e. fossil-based) energy technologies and other radically new technologies behaving differently. We provide suggestive, but convincing evidence that such decrease in fragmentation around the turn of the century emerged as a result of the EU increased support for RES taking mainly the form of demand-pull policies. |
| Keywords: | EU integration; renewable energy technologies; knowledge flows |
| JEL: | O31 Q42 Q55 Q58 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95775&r=all |
| By: | Louis-Gaëtan Giraudet (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech, ENPC - École des Ponts ParisTech); Antoine Missemer (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Energy efficiency can be considered as a central pillar of global warming mitigation, with important co-benefits, including productivity gains, resource conservation or national security. It is also a subject of controversy between engineers and economists, who have divergent conceptions of the notion of optimality that delineates energy efficiency potentials. Modern surveys hardly go back beyond the 1970s and do not fully explore the reasons and conditions for the persistent differences between economists' and engineers' views. This paper provides such a historical account, investigating the positioning of economic analysis in contrast to the technical expertise on key energy efficiency topics – the rebound effect, the energy efficiency gap, and green nudges, from the 19th century to the present day. It highlights the permanence and evolution in the relationship that economists have had with technical expertise. An extension of the current conceptual framework is finally provided to connect our historical findings with avenues for future research. |
| Keywords: | engineering,nudge,history of economic thought,energy efficiency,market barriers and failures |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02301636&r=all |
| By: | Fumagalli, Chiara; Motta, Massimo |
| Abstract: | We show that the incentive to engage in exclusionary tying (of two complementary products) may arise even when the incumbent's dominant position in the primary market cannot be protected. By engaging in tying, an incumbent firm sacrifices current profits but can exclude a more efficient rival from a complementary market by depriving it of the critical scale it needs to be successful. In turn, exclusion in the complementary market allows the incumbent to be in a favorable position when a more efficient rival will enter the primary market, and to appropriate some of the rival's efficiency rents. The paper also shows that tying is a more profitable exclusionary strategy than pure bundling, and that exclusion is the less likely the higher the proportion of consumers who multi-home. |
| Keywords: | Inefficient foreclosure; network externalities; Scale Economies; Tying |
| JEL: | K21 L41 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14031&r=all |
| By: | Enflo, Kerstin; Karlsson, Tobias; Molinder, Jakob |
| Abstract: | There is a wide-spread concern that technical change may spur social conflicts, especially if workers are replaced with machines. To empirically analyze whether job destruction drives protests, we study a historical example of a revolutionary new technology: the adoption of electricity. Focusing on the gradual roll-out of the Swedish electricity grid between 1900 and 1920 enables us to analyze 2,487 Swedish parishes in a difference-in-differences framework. Proximity to large-scale water-powered electricity plants is used to instrument for electricity adoption. Our results confirm that the labor saving nature of electricity was followed by an increase of local conflicts in the form of strikes. But displaced workers were not likely to initiate conflicts. Instead, strikes were most common in sectors with employment growth. Similarly, we find that the strikes were of an offensive rather than a defensive nature. Thus, electrification did not result in rebellions driven by technological anxiety. It rather provided workers with a stronger bargaining position from which they could voice their claims through strikes. |
| Keywords: | electrification; infrastructure investments; Labor conflicts; labor demand; strikes; Technological change |
| JEL: | N14 N34 N74 O14 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13986&r=all |
| By: | Ha-Hyun Jo (Yonsei Univ); Hae-Dong Kim (Yonsei Univ) |
| Abstract: | handled by domestic research and give an improvement of those through recent energy poverty indicators capturing the multifaceted notion. There are five main problems in the previous energy poverty indicators in Korea. First of all, it is the absence of macro indicators and they do not take into consideration the effect of energy efficiency. Energy poverty’s main drivers including energy efficiency are widely recognized. But there are only few studies to capture the multidimensional concept of energy poverty. So the goal of this paper is to contribute to develop the notion of energy poverty by comparing the various multidimensional indicators and to propose how to capture the multifaceted nature for the indicators. |
| Keywords: | energy poverty, energy poverty indicators, residual income, energy efficiency, macro indicator |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:yon:wpaper:2019rwp-149&r=all |
| By: | Kazan, Erol; Tan, Chee-Wee; Lim, Eric T.K; Sørensen, Carsten; Damsgaard, Jan |
| Abstract: | Digital platforms confer competitive advantage through superior architectural configurations. There is however still a dearth of research that sheds light on the competitive attributes which define platform competition from an architectural standpoint. To disentangle platform competition, we opted for the mobile payment market in the United Kingdom (UK) as our empirical setting. By conceptualizing digital platforms as layered modular architectures and embracing the theoretical lens of strategic groups, this study supplements prior research by deriving a taxonomy of platform profiles that is grounded on the strategic dimensions of value creation and value delivery architectures. We discover that mobile payment platforms could be delineated based on whether they are: (1) integrative or integratable on their value creation architecture; and (2) have direct, indirect, or open access on their value delivery architecture. The preceding attributes of value creation architecture and value delivery architecture aided us in identifying six profiles associated with mobile payment platforms, which in turn led us to advance three competitive strategies that could be pursued by digital platforms in network economies. |
| Keywords: | Competition; digital infrastructures; digital platforms; financial technologies; mobile payments; network economies; strategic groups |
| JEL: | J50 |
| Date: | 2018–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86345&r=all |
| By: | Frédéric Dobruszkes |
| Abstract: | The potential impacts of Brexit on transportation have been discussed to some extent, mostly considering the economic shock as a main factor that would affect the volume of passenger and cargo flows. However, one should also consider the expected impact in terms of regulatory regimes. This specifically concerns aviation, traditionally a tightly regulated market that was extensively liberalised by the European Union. In this note, the worst scenario is tested. Namely, UK airlines would not operate services between or within third countries anymore, and non-UK airlines could only link the UK to their home country. This leads to the concept of “vulnerable” air services, which are mapped at the airport level. The likely consequence is that a myriad of regional airports would be affected, especially in Poland, but also in various tourist areas. In addition, several larger airports and the secondary airports of large cities would also be significantly affected, especially London Stansted. |
| Keywords: | Brexit; Europe; Air market; Aviation liberalisation; Aviation regulation |
| Date: | 2019–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/280924&r=all |
| By: | Milan Straka; Pasquale De Falco; Gabriella Ferruzzi; Daniela Proto; Gijs van der Poel; Shahab Khormali; \v{L}ubo\v{s} Buzna |
| Abstract: | The availability of charging infrastructure is essential for large-scale adoption of electric vehicles (EV). Charging patterns and the utilization of infrastructure have consequences not only for the energy demand, loading local power grids but influence the economic returns, parking policies and further adoption of EVs. We develop a data-driven approach that is exploiting predictors compiled from GIS data describing the urban context and urban activities near charging infrastructure to explore correlations with a comprehensive set of indicators measuring the performance of charging infrastructure. The best fit was identified for the size of the unique group of visitors (popularity) attracted by the charging infrastructure. Consecutively, charging infrastructure is ranked by popularity. The question of whether or not a given charging spot belongs to the top tier is posed as a binary classification problem and predictive performance of logistic regression regularized with an l-1 penalty, random forests and gradient boosted regression trees is evaluated. Obtained results indicate that the collected predictors contain information that can be used to predict the popularity of charging infrastructure. The significance of predictors and how they are linked with the popularity are explored as well. The proposed methodology can be used to inform charging infrastructure deployment strategies. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1910.02498&r=all |
| By: | Ivan Marinovic (Stanford University); Martin Szydlowski (University of Minnesota) |
| Abstract: | We study the disclosure policy of a regulator overseeing a monitor with reputation concerns, such as a bank or an auditor. The monitor faces a manager, who chooses how much to manipulate given the monitor’s reputation. Reputational incentives are strongest for intermediate reputations and uncertainty about the monitor is valuable. Instead of providing transparency, the regulator’s disclosure keeps the monitor’s reputation intermediate, even at the cost of diminished incentives. Beneficial schemes feature random delay. Commonly used ones, which feature immediate disclosure or fixed time delay, destroy reputational incentives. Surprisingly, the regulator discloses more aggressively when she has better enforcement tools. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:125&r=all |