|
on Regulation |
| By: | Garrod, Luke; Li, Ruochen; Wilson, Christopher |
| Abstract: | Automated switching services have recently emerged as online intermediaries that use algorithms to facilitate consumer switching. Unlike price comparison websites, these services i) act on behalf of consumers by actively switching them to the cheapest deals, ii) typically charge consumers directly, rather than charging suppliers commission, and iii) often survey across the entire market. We offer the first theoretical analysis of such services. In an oligopoly model with imperfect price information, we characterize an equilibrium with an auto-switching service, and analyze its impact on market outcomes and welfare. |
| Keywords: | Consumer Switching; Consumer Search; Price Information; Intermediary; Automated; Competition. |
| JEL: | D43 D83 L13 |
| Date: | 2023–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118492&r=reg |
| By: | Daron Acemoglu; Philippe Aghion; Lint Barrage; David Hémous |
| Abstract: | We investigate the short- and long-term effects of a natural gas boom in an economy where energy can be produced with coal, natural gas, or clean sources and the direction of technology is endogenous. In the short run, a natural gas boom reduces carbon emissions by inducing substitution away from coal. Yet, the natural gas boom discourages innovation directed at clean energy, which delays and can even permanently prevent the energy transition to zero carbon. We formalize and quantitatively evaluate these forces using a benchmark model of directed technical change for the energy sector. Quantitatively, the technology response to the shale gas boom results in a significant increase in emissions as the US economy is pushed into a “fossil-fuel trap” where long-run innovations shift away from renewables. Overall, the shale gas boom reduces our measure of social welfare under laissez-faire, whereas, combined with carbon taxes and more generous green subsidies, it could have increased welfare substantially. |
| JEL: | O30 O41 O44 Q33 Q43 Q54 Q55 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31657&r=reg |
| By: | Leonardo Madio (University of Padova); Aldo Pignataro (Italian Regulatory Authority for Energy, Networks and Environment) |
| Abstract: | We study an infinitely repeated oligopoly game in which firms compete on quantity and one of them is capacity constrained. We show that collusion sustainability is non-monotonic in the size of the capacity constrained firm, which has little incentive to deviate from a cartel. We also present conditions for the emergence of a partial cartel, with the capacity constrained firm being excluded by the large firms or self-excluded. In the latter case, we show under which circumstances the small firm induces a partial conspiracy that is Pareto-dominant. Implications for cartel identification and enforcement are finally discussed. |
| Keywords: | Antitrust, capacity constraints, collusion, partial cartel. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0295&r=reg |
| By: | Chongwoo Choe; Noriaki Matsushima; Shiva Shekhar |
| Abstract: | We study the GDPR’s opt-in requirement in a model with a firm that provides a digital service and consumers who are heterogeneous in their valuations of the firm’s service as well as the privacy costs incurred when sharing personal data with the firm. We show that the GDPR boosts demand for the service by allowing consumers with high privacy costs to buy the service without sharing data. The increased demand leads to a higher price but a smaller quantity of shared data. If the firm’s revenue is largely usage-based rather than data-based, then both the firm’s profit and consumer surplus increase after the GDPR, implying that the GDPR can be welfare-improving. But if the firm’s revenue is largely from data monetization, then the GDPR can reduce the firm’s profit and consumer surplus. |
| Keywords: | GDPR, opt-in, opt-out, privacy management, welfare |
| JEL: | D18 D61 K24 L12 L51 L86 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10617&r=reg |
| By: | Nishant Chadha; Viswanath Pingali; Daniel Sokol |
| Abstract: | We investigate strategies of small businesses’ usage of digital platforms for advertising and sales. We rely on primary data from a quantitative survey of small business startups, and a few in-depth interviews of small business owners. We find that small firms prefer digital platforms for advertising and sales over conventional methods. As firms grow, while they continue to rely on digital advertising, their preference for conventional advertising (radio, television, etc.) increases. We find a strong correlation between the geographical spread of small firm sales, including exports, and their propensity to use digital platforms. We also find that small businesses multihome on both advertising and sales platforms. Multihoming occurs across established platforms and between established and nascent platforms. Our results enhance the understanding of how small firms rely on platforms and inform the policy debates on platform regulation. |
| Date: | 2023–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:14704&r=reg |
| By: | Quang Minh Nguyen (Universitat de Valencia) |
| Abstract: | This study contributes to the empirical literature on the effects of privatization on the financial and operating performance of former state-owned enterprises (SOEs) and offers evidence on the heterogeneity of these effects across multiple dimensions. Utilizing a sample comprising 770 privatized SOEs and 2, 154 non-privatized SOEs in Vietnam from 2006 to 2010, I conduct a staggered diff-in-diff estimation to identify the causal impact of privatization on firm's performance. The results reveal that, on average, privatizaion led to an increase of 5% in sales per worker, a 23-27% increase in profitability measures, and 8% decrease in debt ratio, and a 5% decline in total employment. However, little changes in post-privatization performance are observed for large SOEs, strategic SOEs, and service SOEs. |
| Keywords: | Privatization, firm performance, staggered difference-in-differences, heterogeneous treatment effects |
| JEL: | N25 G34 L33 P31 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:bci:wpaper:2303&r=reg |
| By: | Olivier Deschenes; Christopher Malloy; Gavin G. MacDonald |
| Abstract: | Despite a 30-year long history, Renewable Portfolio Standards (RPS) remain controversial and debates continue to surround their efficacy in leading the low-carbon transition in the electricity sector. Contributing to the ongoing debates is the lack of definitive causal evidence on their impact on investments in renewable capacity and generation. This paper provides the most detailed analysis to date of the impact of RPSs on renewable electricity capacity investments and on generation. We use state-level data from 1990-2019 and recent econometric methods designed to address dynamic and heterogeneous treatment effects in a staggered adoption panel data design. We find that, on average, RPS policies increase wind generation capacity by 600-1200 MW, a 44% increase, but have no significant effect on investments in solar capacity. Additionally, we demonstrate that RPSs have slow dynamic effects: most of the capacity additions occur 5 years after RPS implementation. Estimates for wind and solar electricity generation mimic those for capacity investments. We also find similar results using an alternate treatment definition that allows states to meet their RPS requirements with pre-existing renewable generation and renewable generation from nearby states. |
| JEL: | Q20 Q42 Q50 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31568&r=reg |
| By: | Bruno N. Ibekilo (Chukwuemeka Odumegwu Ojukwu University, Nigeria); Chukwunonso Ekesiobi (Chukwuemeka Odumegwu Ojukwu University, Nigeria); Precious M. Emmanuel (University of Ibadan, Oyo State, Nigeria) |
| Abstract: | The pace of urbanisation, the intensity of energy consumption, and the quality of environmental regulation level pose a severe threat to environmental sustainability in Africa. Hence, we examine the role of regulatory quality on environmental pollution through urbanisation and energy consumption channel in 33 African nations between 1996 and 2020. Our study considers cross-sectional dependence in Africa; as a result, we employ the Augmented Mean Group (AMG) method and Common Correlated Effect Mean Group (CCEMG) for a robustness check to analyse the panel series. The study finds that (i) urbanisation increases environmental pollution, (ii) energy consumption accelerates environmental degradation, (iii) regulatory quality can partially mediate pollution in Africa via urbanisation and energy consumption channels, and (iv) The interaction of regulatory quality with urbanisation and energy consumption, respectively reduce environmental pollution establishing a moderation effect. The study suggests that African countries tighten environmental regulatory policies to lessen carbon emissions and drive environmental sustainability towards achieving carbon neutrality by 2050. |
| Keywords: | Heterogeneous, Urbanisation, Energy consumption, Environmental pollution, Regulation, Africa |
| JEL: | C20 R00 Q40 Q52 L52 N57 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:23/056&r=reg |
| By: | Lerner, Michael |
| Abstract: | The majority of U.S. states have set targets for renewable energy, but the prospects for meeting most of these goals hinge on the willingness of local governments to allow large-scale renewable energy projects in their communities. In this paper, I investigate how exposure to lobbying by wind developers and the actions of neighboring jurisdictions inform the adoption and design of rules for siting commercial wind farms. Using data collected from 1603 counties in 23 states, I find local policymakers are more likely to enact wind ordinances when they have more time to interact with wind developers and when neighboring counties have adopted wind ordinances or approved the construction of wind farms. I also observe that counties tend to adopt more stringent rules when more wind farms have been built in neighboring counties. This evidence suggests that efforts to scale up renewable energy generation may encounter increasing resistance from local governments. |
| Keywords: | climate change; comparative governance; developed countries; economic development; energy; innovation |
| JEL: | N0 |
| Date: | 2022–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112757&r=reg |
| By: | Nilsson, Jan-Eric (Swedish National Road & Transport Research Institute (VTI)); Odolinski, Kristofer (Swedish National Road & Transport Research Institute (VTI)); Nyström, Johan (NYFOU) |
| Abstract: | One of the consequences of the institutional separation of railway infrastructure from train operations in Europe is a misalignment of incentives in which the actions of one party may create costs for the other. To internalise otherwise external costs of track-works experienced by train operators and customers, it is essential to reform the way in which project contracts are tendered. This study suggests a self-selection mechanism for tendering rail infrastructure activities. Bidders may therefore submit bids based on the industry’s standard Unit Price Contract or a Fixed-Price Contract. The mechanism is designed to increase the possibility for a welfare maximising trade-off between construction and user costs. Using standard Benefit-Cost principles and parameter values, a case study where five switches are replaced provides substance to the discussion. The study provides a starting point for addressing risk in the construction industry and a blueprint for further development by professionals to fill in gaps and to test the approach under a controlled format before full-scale implementation. |
| Keywords: | Procurement; Risk; Rail infrastructure; Vertical separation; Delay fee; Unit price contract; Fixed-price contract |
| JEL: | H57 R42 R48 |
| Date: | 2023–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vtiwps:2023_010&r=reg |
| By: | Greg Buchak (Stanford University); Vera Chau (University of Geneva; Swiss Finance Institute); Adam Jørring (Boston College) |
| Abstract: | We document that in the US residential mortgage market, the share of integrated intermediaries acting as both originator and servicer has declined dramatically. Exploiting a regulatory change, we show that borrowers with integrated servicers are more likely to refinance, and conditional on refinance, are more likely to be recaptured by their own servicer. Recaptured borrowers pay lower fees relative to other refinancers. This trend is partially offset by a rise in integrated fintech originator-servicers, who recapture at higher frequency but at worse terms. We build and calibrate a dynamic structural model to interpret these facts and quantify their impact on equilibrium outcomes. Our model suggests that integreated intermediaries enjoy a marginal cost advantage when refinancing recaptured borrowers, and fully disintegrating them would reduce refinancing frequencies and increase fees. Fintechs use technology to reacquire customers and reduce borrower inertia against refinancing. This endogenously creates market power, which fintechs exploit through higher fees. Despite worse terms ex-post, fintechs increase consumer welfare ex-ante by increasing refinancing frequencies. Taken together, our results highlight the importance of intermediaries’ scope in consumer financial outcomes and highlight a novel, quantitatively important application of fintech: customer acquisition. |
| Keywords: | Financial intermediation, disintermediation, mortgage servicing, refinancing, fintech |
| JEL: | G21 G23 E44 L12 L42 O16 O33 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2367&r=reg |
| By: | Xu, Lili; Matsumura, Toshihiro |
| Abstract: | This study investigates the relationship between market transparency and economic welfare in a mixed duopoly in which a welfare-maximizing public firm competes with a profit-maximizing private firm. We find that the private firm’s market share, consumer surplus, and welfare increase with market transparency. Further, the relationship between the private firm’s profit and market transparency has an inverted U shape. This result suggests that profit-maximizing firms may have incentives to improve market transparency, especially when the degree of market transparency is low, which is in sharp contrast to the results under a private duopoly. |
| Keywords: | market transparency, mixed oligopoly, product differentiation, unconstrained Hotelling model, profit-enhancing market transparency, crowding out |
| JEL: | L13 L15 L32 L33 |
| Date: | 2023–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118415&r=reg |
| By: | Bulearca, Marius (Centrul de Economia Industriei si Serviciilor, Institutul National de Cercetari Economice al Academiei Romane); Muscalu, Mihai-Sabin (Centrul de Economia Industriei si Serviciilor, Institutul National de Cercetari Economice al Academiei Romane) |
| Abstract: | The natural gas crisis was a deep one. As Europeans paid higher bills starting in the winter of 2021-2022, European energy markets, from natural gas to carbon permits, hit new records. Geopolitics was not missing from the landscape either, where Russia made moves proving that Europe still remains, regardless of declarations, dependent on Russian gas. Starting from these considerations, the article aims to carry out an analysis of the causes that led to the emergence of the natural gas crisis, as well as the evolution of their prices in Romania. Thus, the paper studies the evolution of natural gas prices on specific markets and presents the measures taken by the Romanian Government to protect consumers (and primarily household consumers) in the face of high natural gas and, implicitly, energy prices, as well as the effects induced by them to players on the market, but also the long-term prospects, in the context of the (ongoing) conflict in Ukraine. Since the use of natural gas will continue to play an important role in supporting the transition of the EU economy from solid or nuclear fuel to green energy, at the end of the article it is concluded that the Romanian state authorities must give the national energy strategy the importance and urgency of the moment, and the subsequent implementation of the strategy must allow Romania to use its high potential, compared to other European countries, so as to become energy independent. |
| Keywords: | natural gas price, price cap, European Union, TTF Amsterdam hub, CEGH Vienna hub, Romanian Commodity Exchange |
| JEL: | D18 I38 L71 Q34 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:ror:seince:230912&r=reg |
| By: | ANDREI, Dalina-Maria |
| Abstract: | This paper discusses the energy issue in the European Union and the EU’s progress on energy efficiency since the Energy Efficiency related Directive of 2012 (EED): (i) The energy consumption dynamic (primary and final energy consumption), (ii) Directives and other regulations adopted by the EU’s institutions between 2012-2022, for energy consumption and efficiency targets established for both the Union, on aggregate, and for its individual member states, (iii) The National Energy and Climate Plans (NECPs) face to corresponding 2020 accomplishments and to 2030 projections, (iv) The same 2030 forecasts in the long-term context of climate neutrality to be ensured up to 2050. All these will be approached below in our argumentation. Effective energy consumption data are retrieved from Eurostat and International Energy Agency (IEA). Optimism comes up for the 2030 perspective, since the 2020 specific performances was done, partly despite the recent COVID-19 pandemic related circumstances of 2020. A list of possible responses to some questions will conclude this paper: ‘How receptive will the member states be in the future for transposing the EU's energy efficiency ambitions into their own strategies?’ and ‘Will the European policies be rigorous enough, but also flexible to achieve long-term objectives?’. |
| Keywords: | energy efficiency, primary energy consumption, final energy consumption, energy targets, Green Deal. |
| JEL: | Q40 Q43 Q48 |
| Date: | 2023–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118326&r=reg |
| By: | Alessandro De Chiara; Juan-José Ganuza; Fernando Gómez; Ester Manna; Adrián Segura |
| Abstract: | This paper presents a framework where sellers, an online platform with monopoly power, and consumers transact. We aim to study the interaction between the imposition of liability on the platform, the reputational sanctions exerted by consumers, and the internal measures adopted by the platform to keep in check the sellers, whenever a product generates losses to consumers. We show that introducing direct legal liability of the platform may have both positive and negative effects for safety investments. Additionally, when sellers are heterogeneous (with respect to their sensitivity to the sanctions from consumers or from the platform), legal liability on the platform will have an impact on the selection of participating sellers, although the sign and size of the effect largely depend on paremeter values. |
| Keywords: | platform liability, third-party sellers, reputation |
| JEL: | K13 L15 L51 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1403&r=reg |