|
on Regulation |
| By: | Bruno Jullien (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Wilfried Sand-Zantman |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03476144&r= |
| By: | Martin, Simon; Schmal, W. Benedikt |
| Abstract: | Sophisticated collusive compensation schemes such as assigning future market shares or direct transfers are frequently observed in detected cartels. We show formally why these schemes are useful for dampening deviation incentives when colluding firms are temporary asymmetric. The relative attractiveness of each of these schemes is shaped by firms' ability to predict future market conditions, possibly aided by algorithms. Prices and profits are inverse u-shaped in prediction ability. Assigning future market shares is optimal when prediction ability is intermediate, and otherwise direct transfers are optimal. Competition authority's limited resources should be utilized to respond to these changing market conditions. |
| Keywords: | algorithmic collusion,market forecasting,prediction ability,firm asymmetry,compensation schemes |
| JEL: | D21 L41 L51 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:375&r= |
| By: | Hunold, Matthias; Schad, Jannika |
| Abstract: | We review the Chicago school's single monopoly profit theory whereby an upstream monopolist cannot increase its profits through vertical integration as it has sufficient market power anyways. In our model the dominant supplier has full bargaining power and uses observable two-part tariffs. We show that, by vertically integrating with a downstream incumbent, the supplier can profitably commit to pricing more aggressively if a downstream entrant refuses its supply contract. This can deter welfare-enhancing entry. The anti-competitive effects arise from the seemingly pro-competitive elimination of double marginalization. We relate our model to hybrid platforms and, in particular, Apple's App store. |
| Keywords: | double marginalization,entry deterrence,exclusive dealing,foreclosure,verticalmerger |
| JEL: | L22 L40 L42 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:373&r= |
| By: | Federico Etro |
| Abstract: | We study platforms setting access prices and commissions on revenues of sellers engaged in monopolistic competition with free entry, as the app providers on the app stores of Apple and Android devices. Competition to attract buyers and sellers induces the platforms to redistribute all the revenues through lower access prices and set the optimal commission rates from the point of view of consumers, taking into account the pass-through on the prices of sellers, the elasticities of demand and surplus for their services and the elasticity of entry with respect to profitability. We discuss the role of heterogeneous sellers, substitutability between sellers's products and the introduction of platforms's products, as well as some limitations of the basic alignment of interest of platforms and consumers due to direct channels for sellers and consumer myopia. |
| Keywords: | Digital platforms, Third-party Sellers, Commissions, Entry. |
| JEL: | L1 L4 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2021_22.rdf&r= |
| By: | Doh-Shin Jeon; Bruno Jullien (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Mikhail Klimenko |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03476164&r= |
| By: | Andreea Cosnita-Langlais; Jean-Philippe Tropeano |
| Abstract: | This paper examines the impact of commitment decisions on the efficiency of antitrust enforcement. We discuss the optimal use of commitments considering past rulings as a source of knowledge to better assess future similar antitrust cases. Our framework combines two key effects: the deterrence of the anticompetitive behavior by the different enforcement regimes, and the dynamic perspective through litigation as a source of learning. We show that if the level of penalty is high enough, the antitrust authorities undervalue the dynamic informational benefit of litigation and tend to over-use commitments. |
| Keywords: | antitrust, commitments, deterrence, legal learning |
| JEL: | L41 K21 D82 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2021-37&r= |
| By: | Federico Etro |
| Abstract: | We study a hybrid marketplace such as Amazon selling its own products and setting commissions on sellers engaged in monopolistic competition with free entry. For a large class of microfoundations based on a representative agent, the introduction of products by the marketplace is neutral on consumer welfare for a given commission, but exerts an ambiguous impact through its changes: a "demand substitution mechanism" pushes for a higher commission, but an "extensive margin mechanism" pushes for a lower commission aimed at attracting new sellers and more purchases on the marketplace. With constant demand elasticities, a hybrid marketplace sets a lower (higher) commission rate and increases (decreases) consumer welfare compared to a pure marketplace if its products face a less (more) elastic demand. We extend the analysis to alternative timing, Bertrand competition between sellers, endogenous product selection by the marketplace, specific commissions and ads for product discovery. |
| Keywords: | Hybrid marketplaces, 3P Sellers, Commissions, Entry, Monopolistic Competition. |
| JEL: | L1 L4 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2021_21.rdf&r= |
| By: | Joseph U. Podwol (U.S. Department of Justice); Alexander Raskovich (U.S. Department of Justice) |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:doj:eagpap:202104&r= |
| By: | Jacob Burgdorf (U.S. Department of Justice) |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:doj:eagpap:202103&r= |
| By: | Kohei Daido (School of Economics, Kwansei Gakuin University); Tomoya Tajika (Hokusei Gakuen University) |
| Abstract: | This study examines the effect of the principal's control over the agent's behavior in a dynamic principal-agent model with hidden information. We show the condition that the agent who has a similar preference for actions as the principal dares to choose the unpreferred action when the principal imposes a sanction on such an action. This also makes the principal worse off even when imposing sanctions is materially costless. When the principal incurs a cost on sanctions, they cease implementing them after observing the unpreferred action taken by the agent. Our results of the hidden cost of control correspond to the insight from the psychological reactance theory: when an agent's freedom is threatened, they resist it to restore the freedom. |
| Keywords: | Dynamic principal-agent model, Hidden cost of controls, Psychological reactance, Ratchet effects, Sanction |
| JEL: | D82 D86 D91 M52 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:233&r= |
| By: | Mehmet Canayaz (Pennsylvania State University - Smeal College of Business(HEC Lausanne); Swiss Finance Institute); Ilja Kantorovitch (EPFL CFI SFI.LL); Roxana Mihet (Swiss Finance Institute - HEC Lausanne) |
| Abstract: | We analyze how the adoption of the California Consumer Protection Act (CCPA), which limits buying or selling consumer data, heterogeneously affects firms with and without previously gathered data on consumers. Exploiting a novel and hand-collected data set of 11,436 conversational-AI firms with rich personal data on identifiable U.S. consumers, we find that the CCPA gives a strong protection and advantage to firms with in-house data on consumers. First, products of these firms experience significant appreciations in customer ratings and are able to collect more customer data relative to their competitors after the adoption of the CCPA. Second, publicly traded firms with in-house data exhibit higher valuations, profitability, asset utilization, and they invest more after the adoption of the CCPA. Third, earnings of such firms can be more accurately predicted by analysts. To rationalize these empirical findings, we build a general equilibrium model where firms produce final goods using labor and data in the form of intangible capital, which can be traded with other firms subject to an iceberg transportation cost. When the introduction of the CCPA increases the transportation cost, firms without in-house data suffer the most because they cannot adequately substitute the previously externally purchased data, while firms with in-house data expand their market share. |
| Keywords: | Privacy, Voice Data, In-House Data, Big Data, Intangible Capital |
| JEL: | D80 G30 G31 G38 L20 O30 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2192&r= |
| By: | Bianchi, Milo; Bouvard, Matthieu; Gomes, Renato; Rhodes, Andrew; Shreeti, Vatsala |
| Abstract: | We connect various streams of academic literature to shed light on how the degree of interoperability in mobile payments affects market outcomes and welfare. We organize our discussion around four dimensions of interoperability. First, we consider mobile network interoperability (whether clients of one telecom can access another telecom’s payment services) in connection with the IO literature on tying. Second, we discuss platform level interoperability (the ability to send money offnetwork) in light of the literature on compatibility. We also build on the behavioral IO literature to suggest how the effects of interoperability may be very heterogeneous across various types of firms and consumers, or even backfire. Third, we consider interoperability in the cash-in-cash-out agent network, in light of the literature on co-investment in network industries, and of more specific studies on ATMs’ interoperability. Fourth, we discuss how the literature in banking and on data ownership can be used to understand interoperability of data. We conclude with some broader remarks on policy implications and on possible directions for future research. |
| Keywords: | Mobile Payments, Interoperability, Financial Inclusion, Competition; Policy. |
| JEL: | L51 L96 G23 G28 O16 |
| Date: | 2021–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126276&r= |
| By: | Loïc Bonneval (Univ Lyon, Université Lumière Lyon 2, Centre Max Weber UMR 5283, F-69007 Lyon, France); Florence Goffette-Nagot (Univ Lyon, CNRS, GATE UMR 5824, F-69130 Ecully, France); Zhejin Zhao (Faculty of Business and Economics, University of Hong Kong, Hong Kong, China) |
| Abstract: | This paper reexamines the debated issue of the effects of rent control policy on the rental market. We investigate the impact on rents of three different forms of rent regulation in Lyon over a 78-years period. We use an original historical dataset which allows us to track regulation changes, rent paid and tenant moves for a long-run panel of flats. Using a difference-in-differences method, we estimate the impact of regulation on rents depending on the type of rent control over different economic periods. Our results show that the impact of rent control deepened over time. Starting with a 11% reduction in rents between 1914 and 1929, it reached a decrease by 47% in the regulated rental market in the 1949-1968 period. We do not find any increase in rents in the unregulated segment of the rental market, which could be a result of a reduction in housing investment in the long run. |
| Keywords: | Rent control; Housing policy; Difference-in-differences |
| JEL: | R38 N93 N94 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2119&r= |
| By: | Noah J. Trudeau (West Virginia University, Department of Economics) |
| Abstract: | Occupational licensing has been shown to have many pervasive economic effects. Licensing restricts competition, which causes wage premiums, potentially induces rent seeking, and ultimately results in consumers having to pay high prices through both channels of reduced supply and producers passing on increased cost of doing business. Licensing laws are passed at the state level; and thus, there can be considerable variation across states. Should there be much economic activity at state borders, this would be inconsequential. Yet, the existence of metropolitan areas spanning state borders begs the question of what effects can restricting competition be when competitive substitutes are easily available. This theory is tested using major MSAs that cross state borders and data from the American Community Survey to show how the differing licensing schemes affect the incomes of practicing massage therapists. Ultimately, it appears that the effect of easily available substitutes of massage therapists in the border state mutes the effect of the wage premium that would be caused by a more restrictive licensure scheme. Not only do wage premiums not appear in geographically adjacent states, it is especially missing in border MSAs. |
| Keywords: | Occupational Licensing, Massage Therapists |
| JEL: | J44 K31 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:21-03&r= |
| By: | Adam N. Smith; Stephan Seiler; Ishant Aggarwal |
| Abstract: | We examine the profitability of personalized pricing policies that are derived using different specifications of demand in a typical retail setting with consumer-level panel data. We generate pricing policies from a variety of models, including Bayesian hierarchical choice models, regularized regressions, and classification trees using different sets of data inputs. To compare pricing policies, we employ an inverse probability weighted estimator of profits that explicitly takes into account non-random price variation and the panel nature of the data. We find that the performance of machine learning models is highly varied, ranging from a 21% loss to a 17% gain relative to a blanket couponing strategy, and a standard Bayesian hierarchical logit model achieves a 17.5% gain. Across all models purchase histories lead to large improvements in profits, but demographic information only has a small impact. We show that out-of-sample hit probabilities, a standard measure of model performance, are uncorrelated with our profit estimator and provide poor guidance towards model selection. |
| Keywords: | targeting, personalization, heterogeneity, choice models, machine learning |
| JEL: | C11 C33 C45 C52 D12 L11 L81 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9439&r= |
| By: | Preuß, Sabine; Kunze, Robert; Zwirnmann, Jakob; Meier, Jonas; Plötz, Patrick; Wietschel, Martin |
| Abstract: | Plug-in electric vehicles (PEV) are widely considered a promising option to reduce greenhouse gas (GHG) emissions in transport. The electricity used for charging is decisive for the environmental assessment of PEV. Most studies assume the average grid mix for charging. This article provides a systematic overview of existing studies and additional data on the electricity contracts of users and charge point operators (CPO) as well as the share of renewables in the charged electricity for PEV in Europe. We combine survey data with existing studies and cover a noteworthy share of the European PEV market and CPO. Our results show that the actual share of renewables in electricity contracts for home and work charging as well as for public CPO is much higher than in the European grid mix. Despite discussions around the methodological use of contracted renewable electricity, our findings imply that many previous studies underestimated the well-to-wheel life-cycle benefits of PEV. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s112021&r= |
| By: | Fanghella, Valeria; Faure, Corinne; Guetlein, Marie-Charlotte; Schleich, Joachim |
| Abstract: | Public acceptability appears an essential condition for the success of lowcarbon transition policies. In this paper, we investigate the role of self-interest on citizens' preferences for the distribution of costs and of environmental benefits of energy efficiency policies. Using a discrete choice experiment on nationally representative household samples of Italy, Sweden, and the United Kingdom, we first investigate preferences for specific burden-sharing rules and for the distribution of policy environmental benefits accruing primarily in rural and/or urban areas. We examine the role of self-interest in a correlation manner by looking at the effects of income and of location of residency on preferences for these policy attributes. Moreover, we investigate the effect of self-interest on preferences for burden-sharing rules in a causal manner by exogenously priming subsets of participants to feel either rich or poor. Our results suggest that the polluter-pays rule is the most popular burden-sharing rule and an equalamount rule the least popular and that policies with environmental benefits accruing primarily in rural areas are less preferred, with some heterogeneity in preferences across the three countries. We also find evidence for self-interest, both through correlational and through causal approaches. |
| Keywords: | policy acceptability,self-interest,distributional fairness,discretechoice experiment,energy efficiency |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s092021&r= |
| By: | Valentin Mahler (PERSEE - Centre Procédés, Énergies Renouvelables, Systèmes Énergétiques - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres, ADEME - Agence de l'Environnement et de la Maîtrise de l'Energie); Robin Girard (PERSEE - Centre Procédés, Énergies Renouvelables, Systèmes Énergétiques - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres); Georges Kariniotakis (PERSEE - Centre Procédés, Énergies Renouvelables, Systèmes Énergétiques - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres) |
| Abstract: | In many countries, electricity prices on day-ahead auction markets result from a market clearing designed to maximize social welfare. For each hour of the day, the market price can be represented as the intersection of a supply and demand curve. Structural market models reflect this price formation mechanism and are widely used in prospective studies guiding long-term decisions (e.g. investments and market design). However, simulating the supply curve in these models proves challenging since estimating the sell orders it comprises (i.e. offer prices and corresponding quantities) typically requires formulating numerous techno-economic hypotheses about power system assets and the behaviors of market participants. In this paper we propose a method for the parameterization of sell orders associated with production units. The estimation algorithm for this parametrization makes it possible to mitigate the requirement for analytic formulation of all of the above-mentioned aspects and to take advantage of the ever-increasing volume of available data on power systems (e.g. technical and market data). Parametrized orders also offer the possibility to account for various factors in a modular fashion, such as the strategic behavior of market participants. The proposed approach is validated using data related to the French day-ahead market and power system, for the period from 2015 to 2018. |
| Keywords: | Day-ahead markets,Electricity prices,Structural market model,Prospective studies,Power systems |
| Date: | 2021–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03445396&r= |
| By: | Bush, Kristen M.; Lozano, Mark T.; Niemeier, Deb; Kendall, Alissa |
| Abstract: | Senate Bill 350 (SB 350) requires the California Public Utilities Commission (CPUC) to direct utilities to undertake transportation electrification (TE) activities and to ensure that, among other factors, access to TE-related opportunities for low- and moderate-income communities, as well as disadvantaged communities (DACs) increase as TE becomes more widespread. This research explores the range of tangible benefits that the implementation of TE programs can achieve for DACs. The research questions examine how funds spent to date through SB 350 target investment intended to support DACs; how public and private investments in DACs ensure energy justice, transportation justice, and equity, and finally how perceptions and priorities of stakeholders inform the implementation of TE programs. The researchers collected metrics from various California sources and across the literature, and then asked stakeholders in the CPUC Service List associated with SB 350 proceedings to rank and provide their expert opinion on various metrics by their relative importance. From this information, a final weighted evaluation framework was created. The most important metrics for projects targeted under SB 350 were tangible benefits for local community members; improvements in local air pollution; transparent and collaborative community engagement; consideration of end-of-life impacts, and enhanced access to additional sustainable technologies. The least important metrics include forecasted business closures; potential for accident zones; effects on native flora and fauna; upstream impacts (i.e., through raw material acquisition or construction phases), and/or the support of distributed generation and the development of micro-grids in electrification plans. The framework developed as part of this research supports program evaluation by guiding program administrators through a set of questions designed to facilitate a detailed account of expected outcomes and potential externalities. View the NCST Project Webpage |
| Keywords: | Social and Behavioral Sciences, Disadvantaged Communities, Senate Bill 350, transportation electrification, evaluation framework |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt9tc331hz&r= |
| By: | Kimberly Kreiss |
| Abstract: | In the decade prior to the COVID-19 pandemic, bank branches were closing at a steady rate. Additionally, households with a bank account increasingly adopted mobile or online banking for at least a portion of their banking needs. As COVID-19 dramatically changes the desire and willingness for consumers to have in-person interactions, it may accelerate both of these trends and lead to a permanent shift in how people access financial services. |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2021-12-17&r= |