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on Regulation |
| By: | Cojoc, Anca; Ivaldi, Marc; Maier-Rigaud, Frank; März, Oliver |
| Abstract: | We present a structural model to investigate the effects of horizontal cooperation on investment in the context of telecommunication networks. More specifically, we estimate the effect of network sharing in the mobile telecommunications industry on prices, network quality and consumer welfare. The presented framework allows estimating the effects of different types of sharing agreements including common ownership of shared assets in a joint venture company or collaboration via geographical separation (geo-split principle). The proposed identification strategy relies on differences in the costs of network deployment of shared versus non-shared network infrastructure, with different costs affecting operators' optimal choice of price and network quality. We apply the structural model to estimate the effects of a network sharing agreement in the Czech Republic, using a combination of unique datasets on prices, network quality measured as average download speed and operator's costs of network deployment. The results of our model indicate that horizontal cooperation on investments may be beneficial for consumers. Specifically, the network sharing agreement under study generated cost savings for the sharing parties, which were passed-on to consumers in the form of lower prices and higher average download speed. Our findings are of relevance to the assessment of network sharing agreements, which, considering the substantial investment cost associated with the 5G technology, are likely to play an even greater role in the telecommunications industry in the future. The findings are also of relevance to the general literature on horizontal cooperation on investments. |
| JEL: | L11 L40 L96 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14770&r=all |
| By: | Florens Flues; Kurt van Dender |
| Abstract: | Carbon pricing helps countries steer their economies towards and along a carbon-neutral growth path. This paper considers how the design of carbon pricing instruments affects their effectiveness, efficiency and feasibility. Design choices matter both for taxes and Emissions Trading Systems (ETSs). Considering the role of carbon price stability for clean investment, the paper shows how volatile carbon prices can cause risk-averse investors to forego clean investment that they would have undertaken with more stable prices. The paper then evaluates the effectiveness and efficiency of policy instruments to stabilise carbon prices in ETSs, which tend to produce more volatile carbon prices than taxes. The paper analyses the auction reserve price in California, the carbon price support in the UK, and the market stability reserve in the EU ETS. Considering feasibility, the paper discusses the tax (or emissions) base, how revenue use can affect support from households and firms, and administrative choices. |
| JEL: | D04 D40 G11 H21 H23 H32 Q52 Q54 |
| Date: | 2020–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:48-en&r=all |
| By: | Jens-Uwe Franck; Dimitrios Linardatos |
| Abstract: | As of January 2020, Section 58a of the German Payment Services Supervisory Act (PSSA) provides a right for payment service providers and e-money issuers to access technical infrastructure that contributes to mobile and internet-based payment services. This right of access is intended to promote technological innovation and competition in the consumers’ interests in having a wide choice among payment services, including competing solutions for mobile and internet-based payments. The provision has been dubbed ‘Lex Apple Pay’ as it seems to have been saliently motivated by the objective to give payment service providers the right of direct access to the NFC interfaces of Apple’s mobile devices. In enacting Section 58a PSSA, the German legislature has rushed forwards, overtaking the EU Commission’s ongoing competition investigation into Apple Pay as well as the pending reform of the German Competition Act, which is aimed precisely at operators of technological platforms, which enjoy a gatekeeper position. This article explores the scope of application and the statutory requirements of this right of access as well as available defences and possible legal barriers. We point out that, to restore a level playing field in the internal market, the natural option would be to further harmonize EU payment services regulation, including the availability of a right of access to technical infrastructure for mobile and internet-based payment services and e-money issuers. |
| Keywords: | ‘Lex Apple Pay’; Technology platforms; Antitrust; Payment Services Regulation; Mobile Payment; Access to NFC interfaces; Wallet Apps; Internal Market Regulation |
| JEL: | K21 K22 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_173&r=all |
| By: | Erica Bosio; Simeon Djankov; Edward L. Glaeser; Andrei Shleifer |
| Abstract: | We examine a new data set of laws and practices governing public procurement, as well as procurement outcomes, in 187 countries. We measure regulation as restrictions on discretion of the procuring agents. We find that laws and practices are highly correlated with each other across countries, better practices are correlated with better outcomes, but laws themselves are not correlated with outcomes. To shed light on this puzzle, we present a model of procurement in which both regulation and public sector capacity determine the efficiency of procurement. In the model, regulation is effective in countries with low public sector capacity, and detrimental in countries with high public sector capacity because it inhibits the socially optimal exercise of discretion. We find evidence broadly consistent with this prediction: regulation of procurement improves outcomes, but only in countries with low public sector capacity. |
| JEL: | D73 H11 H57 K42 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27188&r=all |
| By: | Fabian St\"ockl; Wolf-Peter Schill; Alexander Zerrahn |
| Abstract: | Green hydrogen can decarbonize transportation, but also help to integrate variable renewable energy sources if its production is sufficiently flexible in time. Using an open-source co-optimization model of the power sector and four supply chains for hydrogen at filling stations, we find a trade-off between energy efficiency and temporal flexibility: for lower shares of renewables and hydrogen, more energy-efficient decentralized electrolysis is optimal. For higher shares of renewables and/or hydrogen, more flexible centralized hydrogen supply chains gain importance as they allow disentangling hydrogen production from demand via storage. Liquid hydrogen emerges as particularly beneficial, followed by liquid organic hydrogen carriers and gaseous hydrogen. Centralized hydrogen supply chains can deliver substantial power sector co-benefits, mainly through reduced renewable surplus generation. Energy modelers and system planners should consider the flexibility characteristics of hydrogen supply chains in more detail when assessing the role of green hydrogen in future energy transition scenarios. |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2005.03464&r=all |
| By: | Sanguinetti, Angela |
| Abstract: | One of the potential consumer benefits of electric vehicles (EVs) is lower fuel and maintenance costs compared to internal combustion engine vehicles (ICEVs). Consumers tend to have difficulty recognizing these cost benefits, however, because of the complexity of comparing gasoline and electricity prices, and comparing long-term operating savings with EV purchase premiums. Online vehicle cost calculators may help consumers navigate this complexity by providing tailored cost estimates and enabling comparisons across vehicles. Of the several vehicle cost calculators available online, functionalities range widely. No existing research establishes the functionalities and features that determine the usefulness of vehicle cost calculators in promoting EV adoption. Researchers at the University of California, Davis drew upon a systematic review of vehicle cost calculators and findings from multiple user experience studies to articulate best practices for the user interface design of effective vehicle cost calculators. The researchers categorized best practices as those related to the vehicle cost calculator use cases, outputs, user experience, and user inputs. View the NCST Project Webpage |
| Keywords: | Social and Behavioral Sciences, Consumer preferences, Consumers, Electric vehicles, Energy resources, Internal combustion engines, Operating costs, User interfaces (Computer science) |
| Date: | 2020–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt2xx5g6pg&r=all |
| By: | Alessandro De Chiara; Marco A. Schwarz |
| Abstract: | Firms have incentives to influence regulators' decisions. In a dynamic setting, we show that a firm may prefer to capture regulators through the promise of a lucrative future job opportunity (i.e., the revolving-door channel) than through a hidden payment (i.e., a bribe). This is because the revolving door publicly signals the firm's eagerness and commitment to reward friendly regulators, which facilitates collusive equilibria. Moreover, the revolving-door channel need not require an explicit agreement between the firm and the regulator, but may work implicitly giving rise to an industry norm. This renders ineffective standard anti-corruption practices, such as whistle-blowing protection policies. We highlight that closing the revolving door may give rise to other inefficiencies. Moreover, we show that cooling-off periods may make all players worse off if timed wrongly. Opening the revolving door conditional on the regulator's report may increase social welfare. |
| Keywords: | collusion, corruption, dynamic games, experts, regulation, regulatory capture, revolving door |
| JEL: | D82 J45 K23 L14 L51 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2020-12&r=all |
| By: | Giulia Brancaccio (Cornell University); Myrto Kalouptsidi (Harvard University); Theodore Papageorgiou (Boston College); Nicola Rosaia (Harvard University) |
| Abstract: | In this paper we explore efficiency and optimal policy in decentralized transportation markets that suffer from search frictions, such as taxicabs, trucks and bulk shipping. We illustrate the impact of two externalities: the well-known thin/thick market externalities and what we call pooling externalities. We characterize analytically the conditions for efficiency, show how they translate into efficient pricing rules, as well as derive the optimal taxes for the case where the planner is not able to set prices. We use our theoretical results to explore welfare loss and optimal policy in dry bulk shipping. We find that the constrained efficient allocation achieves 6% welfare gains, while the first-best allocation corresponding to the frictionless world, achieves 14% welfare gains. This suggests that policy can achieve substantial gains, even if it does not alleviate search frictions, e.g. through a centralizing platform. Finally, we demonstrate that simple policies designed to mimic the optimal taxes perform well. |
| Keywords: | search, friction, efficiency, transport, optimal policy |
| JEL: | F1 L0 L91 R4 R48 |
| Date: | 2020–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:1010&r=all |
| By: | Schleich, Joachim; Lehmann, Sascha; Cludius, Johanna; Abrell, Jan; Betz, Regina Annette; Pinkse, Jonatan |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s072020&r=all |
| By: | Désirée Rückert; Reinhilde Veugelers; Christoph Weiss |
| Abstract: | Using a new survey on digitalisation activities of firms in the EU and the US, we identify digitalisation profiles based on the current use of digital technologies and future investment plans in digitalisation. Our analysis confirms the trend toward digital polarisation and a growing digital divide in the corporate landscape with, on one side, many firms that are not digitally active, and on the other side, a substantial number of digitally active firms forging ahead. Old small firms, with less than 50 employees and more than 10 years old, are significantly more likely to be persistently digitally non-active. We show that these persistently non-digital firms are less likely to be innovative, increase employment or command higher mark-ups. These trends are likely to exacerbate the digital divide across firms in the EU and the US. |
| Keywords: | digital technology, investment, firm performance |
| Date: | 2020–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:654659&r=all |
| By: | David Popp; Jacquelyn Pless; Ivan Haščič; Nick Johnstone |
| Abstract: | Historically, innovation in the energy sector proceeded slowly and entrepreneurial start-up firms played a relatively minor role. We argue that this may be changing. Energy markets are going through a period of profound structural change. The rise of hydrofracturing lowered fossil fuel prices so much that natural gas is now the primary fuel for electricity generation in the US. Renewable energy technologies also experienced significant cost and performance improvements. However, integrating intermittent resources creates additional grid management challenges, requiring further innovation. This chapter documents the evolving roles of innovation and entrepreneurship in the energy sector. First, we provide an overview of the energy industry, highlighting that many new energy technologies are smaller, modular, and increasingly rely on innovation in other fast-moving high-tech sectors. We then conduct two descriptive data analyses that document a sharp decline in both clean energy patenting and start-up activity from about 2010 onwards. We discuss potential explanations and provide some evidence that while innovation in existing technologies may simply have been successful, continued innovation will be needed in enabling technologies that are more likely to depend on progress in other sectors. |
| JEL: | O31 Q4 Q42 Q55 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27145&r=all |
| By: | Amenta, Nina; Sanguinetti, Angela |
| Abstract: | This policy brief summarizes findings and policy implications from a study in which researchers at the University of California, Davis, surveyed over 450 UC Davis faculty, researchers, and staff, and asked them to choose among hypothetical flight options for domestic and international university-related business trips. The hypothetical flight options were developed using actual data on UC Davis employee air travel and available flights. The survey prominently presented emissions estimates for different flight alternatives alongside price, with the lowest-emissions option labeled “greenest flight”. Researchers then estimated the effect that changing the current UC Davis flight-search interface to prominently display emissions, label the greenest flight choice, and present an alternative departure airport could have on the emissions and costs of business-related air travel. View the NCST Project Webpage |
| Keywords: | Social and Behavioral Sciences, Air travel, Airlines, Carbon dioxide, Computer reservation systems, Consumer behavior, Pollutants, Reservations, Travel behavior |
| Date: | 2020–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt6nx526w9&r=all |
| By: | Hung Do; Rabindra Nepal; Russell Smyth |
| Abstract: | We examine the risk transmission mechanisms in the interconnected Australian National Electricity Market (NEM). We illustrate that the transmission of extreme events in terms of their magnitude (via skewness) and the likelihood of their occurrence (via kurtosis) should be considered when promoting NEM interconnectedness. Our empirical findings suggest that interconnectedness costs can be limited by providing sufficient transmission capacities as it can expand generation capacity. Our results suggest that a one percent increase in NEM generation capacity can decrease the transmission of these risks by between 0.9 percent and 1.7 percent, depending on the moment of the electricity return distribution. |
| Keywords: | Australian National Electricity Market, Higher moments, Spillovers, Interconnectedness, Long memory |
| JEL: | L94 L51 C32 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-49&r=all |
| By: | Francesco Decarolis (Bocconi University, IGIER); Raymond Fisman (Boston University); Paolo Pinotti (Bocconi University, BAFFI-CAREFIN); Silvia Vannutelli (Boston University) |
| Abstract: | The benefits of bureaucratic discretion depend on the extent to which it is used for public benefit versus exploited for private gain. We study the relationship between discretion and corruption in Italian government procurement auctions, using a confidential database of firms and procurement officials investigated for corruption by Italian enforcement authorities. Based on a regression discontinuity design around thresholds for discretion, we find that, overall, a large increase in the use of discretionary procedures in the 2000s led to a minimal increase in auctions won by investigated firms. To understand this ‘non-result,’ we further investigate the attributes of “corrupted†auctions. We show that discretionary procedure auctions are associated with corruption only when conducted with fewer than the formally required number of bidders; similarly, discretionary criteria (“scoring rule†rather than first price) auctions are won more often by investigated firms. We further show that these “corruptible†discretionary auctions are chosen more often by officials who are themselves investigated for corruption, but less often in procurement administrations in which at least one official is investigated for corruption. These findings fit with a framework in which more discretion leads to greater efficiency as well as more opportunities for theft, and a central monitor manages this trade-off by limiting discretion for high-corruption procedures and locales. Additional results based on two standard tools for curbing corruption – turnover and subcontracting limits – corroborate this interpretation. Overall, our results imply that discretion is under-utilized, given the high potential benefits as compared to the modest increment in corruption. |
| Keywords: | Corruption, Procurement, Bureaucracy, Competition, Bribes |
| JEL: | C73 D72 D73 K42 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-344&r=all |
| By: | Gale Boyd; Matt Doolin |
| Abstract: | This paper estimates stochastic frontier energy demand functions with non-public, plant-level data from the U.S. Census Bureau to measure the energy efficiency gap and energy price elasticities in the food processing industry. The estimates are for electricity and fuel use in 4 food processing sectors, based on the disaggregation of this industry used by the National Energy Modeling System Industrial Demand Module. The estimated demand functions control for plant inputs and output, energy prices, and other observables including 6-digit NAICS industry designations. Own price elasticities range from 0.6 to -0.9 with little evidence of fuel/electricity substitution. The magnitude of the efficiency estimates is sensitive to the assumptions but consistently reveal that few plants achieve 100% efficiency. Defining a “practical level of energy efficiency” as the 95th percentile of the efficiency distributions and averaging across all the models result in a ~20% efficiency gap. However, most of the potential reductions in energy use from closing this efficiency gap are from plants that are “low hanging fruit”; 13% of the 20% potential reduction in the efficiency gap can be obtained by bringing the lower half of the efficiency distribution up to just the median level of observed performance. New plants do exhibit higher energy efficiency than existing plants which is statistically significant, but the difference is small for most of the industry; ranging from a low of 0.4% to a high of 5.7%. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:20-18&r=all |