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on Regulation |
| By: | Martin Peitz |
| Abstract: | In this chapter, I review the economic theory of two-sided platforms. First, I elaborate on the prevailing price structure in monopoly and oligopoly and explore the prevailing market structure. Second, I consider the choice of non-price strategies that affect users on the platform and address the horizontal and vertical scope of platforms. |
| Keywords: | Two-sided platform, price theory, digital markets, network effects, platform design |
| JEL: | L12 L13 L41 L42 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_584 |
| By: | Daniel Deisenroth; Utsav Manjeer; Zarak Sohail; Steven Tadelis; Nils Wernerfelt |
| Abstract: | Digital advertising, which uses consumer data to target ads to users, now accounts for most of global ad expenditures. Privacy concerns have prompted regulations that restrict the use of personal data. To inform these policy debates, we develop an equilibrium model of advertising and market structure to analyze the impact of privacy regulation on market outcomes. We test the model’s predictions using the launch of Apple’s App Tracking Transparency feature, which created a natural experiment that limited the use of consumer data. Leveraging data from all U.S. advertisers on Meta combined with offline administrative data, we find that reductions in digital ad effectiveness led to decreases in investments in advertising, increases in market concentration, and increases in product prices. These effects are economically meaningful in magnitude and suggest potential harms to both firms and consumers from privacy regulation. |
| JEL: | D22 D40 L10 L59 M38 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32726 |
| By: | Jens-Uwe Franck |
| Abstract: | The EU has set itself an ambitious agenda to tackle climate change. Competition policy, including merger review, is called upon to play its part. Based on an analysis of the Commission’s practice, this paper identifies the key framework issues for the consideration of climate change concerns in merger control and the parameters for addressing them under the EU Merger Regulation and in the light of the European Treaties. One focus is on the implications of the differentiated allocation of regulatory powers. It is argued that a distinction must be made between scenarios in which the climate change argument is used to justify stricter or conceptually extended merger control and those in which it is argued that merger control should need to be relaxed for climate change reasons. With regard to the first scenario, shifts of a normative nature can be observed and are indeed called for, but these take place within the consumer welfare paradigm and it remains the case that the protection of competition is the sole overriding principle of the EU Merger Regulation. In contrast, in the second scenario, merger-specific positive effects on climate concerns need to be considered even if they are not captured by the consumer welfare paradigm. |
| Keywords: | antitrust law, merger control, climate change, environmental sustainability |
| JEL: | K21 K32 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_576 |
| By: | Joshua S. Gans |
| Abstract: | This paper examines the regulation of technological innovation direction under uncertainty about potential harms. We develop a model with two competing technological paths and analyze various regulatory interventions. Our findings show that market forces tend to inefficiently concentrate research on leading paths. We demonstrate that ex post regulatory instruments, particularly liability regimes, outperform ex ante restrictions in most scenarios. The optimal regulatory approach depends critically on the magnitude of potential harm relative to technological benefits. Our analysis reveals subtle insurance motives in resource allocation across research paths, challenging common intuitions about diversification. These insights have important implications for regulating emerging technologies like artificial intelligence, suggesting the need for flexible, adaptive regulatory frameworks. |
| JEL: | L51 O33 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32741 |
| By: | Carl Shapiro; Ali Yurukoglu |
| Abstract: | Has the United States economy become less competitive in recent decades? One might think so based on a body of research that has rapidly become influential for antitrust policy. We explain that the empirical evidence relating to concentration trends, markup trends, and the effects of mergers does not actually show a widespread decline in competition. Nor does it provide a basis for dramatic changes in antitrust policy. To the contrary, in many respects the evidence indicates that the observed changes in many industries are likely to reflect competition in action. We highlight research that points to targeted interventions that can enable antitrust enforcement policy to better promote and protect competition. Throughout the paper, we identify open questions and opportunities for future research in the cross-industry evidence-at-scale paradigm, the industry-specific study paradigm, and their intersection. |
| JEL: | L13 L40 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32762 |
| By: | Rosina Rodríguez Olivera |
| Abstract: | I study the incentives of an informed firm to share its private information with its competitor and the incentives of a regulator to constrain or enforce disclosure in order to benefit consumers. Firms offer differentiated goods, compete a là Bertrand and one firm has an information advantage about demand over its competitor. I show that full disclosure of information is optimal for the informed firm, because it increases price correlation and surplus extraction from consumers. A regulator can increase expected consumer surplus and welfare by restricting disclosure, but consumers can benefit from the regulator privately disclosing some information to the competitor. Disclosure increases the ability of firms to extract surplus from consumers, but private disclosure creates a coordination failure in firm pricing. The optimal disclosure policy is chosen to induce goods to be closer substitutes and intensify the competition across firms. |
| Keywords: | Competition, Information |
| JEL: | D18 D43 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_578 |
| By: | Tomaso Duso; Lea Bernhardt; Joanna Piechucka |
| Abstract: | We discuss the main Theories of Harm in EU merger control and their evolution since the 1990s. We present stylised facts and trends using data extracted from EU merger decisions by natural language processing tools. EU merger policy has adapted over time, both in terms of legislation and theories of harm, as well as in terms of the investigative tools and evidence used. The introduction of the new Merger Regulation in 2004, which led to a change in the substantive test, also brought about significant changes in the use of Theories of Harm. Unilateral theories are now used more frequently and have developed further, in particular in relation to the assessment of closeness of competition. Non-horizontal conglomerate and vertical Theories of Harm focusing on foreclosure issues are now much more common and are a standard tool in most in-depth investigations. More novel Theories of Harm related to innovation and digital markets have been developed and implemented since the 2010’s. While market shares remain a central tool for merger assessment, the use of internal documents has increased, accompanied by the use of quantitative tools. With respect to Commission interventions, structural remedies are used more frequently, although behavioural remedies are also increasingly deployed, especially in Phase II. |
| Keywords: | merger control, theories of harm, unilateral effects, coordinated effects, non-horizontal effects, foreclosure, innovation, ecosystem, digital market shares, internal documents, structural remedies, behavioural remedies |
| JEL: | K21 L40 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11218 |
| By: | Jochen Güntner; Magnus Reif; Maik Wolters; Maik H. Wolters |
| Abstract: | We use a structural VAR model to study the German natural gas market and investigate the impact of the 2022 Russian supply stop on the German economy. Combining conventional and narrative sign restrictions, we find that gas supply and demand shocks have large and persistent price effects, while output effects tend to be moderate. The 2022 natural gas price spike was driven by adverse supply shocks and positive storage demand shocks, as Germany filled its inventories before the winter. Counterfactual simulations of an embargo on natural gas imports from Russia indicate similar positive price and negative output effects compared to what we observe in the data. |
| Keywords: | energy crisis, German natural gas market, narrative sign restrictions, natural gas price, structural scenario analysis, vector-autoregression |
| JEL: | E32 F51 Q41 Q43 Q48 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11191 |
| By: | Louis-Daniel Pape; Michelangelo Rossi |
| Abstract: | This paper examines the impact of the Digital Markets Act (DMA) on consumer behavior, focusing on changes in Google’s search result presentation in the European Union (EU). Specifically, it investigates the effects of Google’s removal of clickable maps in search results, a modification implemented in January 2024. This change forces users to perform additional searches to access Google Maps or alternative mapping services, thus increasing search costs. Using a difference-in-differences approach, we compare Google search volumes from EU to non-EU countries before and after the implementation of the DMA. By eliminating Google Maps’ advantage of being only one click away from Google Search users, we find that EU consumers search significantly more for online mapping services. We measure a 25% and 18% increase in Google’s search volume for the query terms maps and google maps, resulting in an excess of 34, 407, 000 and 8, 901, 000 searches over six months, respectively. This search increase suggests potential exposure to alternative mapping services. However, searches for services like apple maps and bing maps also rose, but not as significantly. Moreover, traffic data shows a non-significant decrease in visits to Google Maps, suggesting minimal migration to alternative services. These findings indicate that removing Google’s one-click advantage can lead to higher search costs for users without significantly boosting the discovery or adoption of alternative mapping services in the short run. |
| Keywords: | self-preferencing, online mapping services, Google Maps, Google Search, Digital Markets Act |
| JEL: | L41 L86 K21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11226 |
| By: | Iwan Bos (Department of Organisation, Strategy, and Entrepreneurship, Maastricht University); Giovanni Maccarrone (Department of Social and Economic Sciences, Sapienza University of Rome); Marco A. Marini (Department of Social and Economic Sciences, Sapienza University of Rome) |
| Abstract: | Anti-consumerism is a doctrine that aims to discourage excessive consumption because of its damaging effect on the environment. It can either focus on creating psychic costs for consumers (a ‘stick’) or psychic benefits for non-consumers (a ‘carrot’). This paper examines the impact of these two approaches on competition and welfare. The competitive effect is comparable in both cases – anti-consumerism (weakly) reduces competitive pressure as well as prices, outputs and profits. In terms of consumer and social welfare, however, the carrot performs strictly better than the stick. |
| Keywords: | Anti-Consumerism, Stick and Carrot, Environmental Externalities |
| JEL: | D11 L13 Q50 Q58 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2024.07 |
| By: | Jose M. Betancourt; Ali Hortaçsu; Aniko Öry; Kevin R. Williams |
| Abstract: | We study dynamic price competition between sellers offering differentiated products with limited capacity and a common sales deadline. In every period, firms simultaneously set prices, and a randomly arriving buyer decides whether to purchase a product or leave the market. Given remaining capacities, firms trade off selling today against shifting demand to competitors to obtain future market power. We provide conditions for the existence and uniqueness of pure-strategy Markov perfect equilibria. In the continuous-time limit, prices solve a system of ordinary differential equations. We derive properties of equilibrium dynamics and show that prices increase the most when the product with the lowest remaining capacity sells. Because firms do not fully internalize the social option value of future sales, equilibrium prices can be inefficiently low such that both firms and consumers would benefit if firms could commit to higher prices. We term this new welfare effect the Bertrand scarcity trap. |
| JEL: | C7 D04 D6 L0 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32673 |
| By: | Katherine Hassett; Rose Mba Mebiame; Aline Mortha; Miwa Nakai; Helene Ahlborg; Kavya Michael; Ugur Ozdemir; Ioannis Tikoudis; Nicolina Lamhauge; Olufolahan Osunmuyiwa; Toshi Arimura; Nick Johnstone |
| Abstract: | This paper offers insights on the factors that determine household choices related to energy use, based on data from the third OECD Survey on Environmental Policies and Individual Behaviour Change (EPIC). The analysis profiles households according to patterns in reported energy use and investment in energy-related technologies, assesses the factors driving such decisions and estimates households’ willingness to pay to reduce the emissions of the electricity they use. Results suggest that the feasibility of installing low-emissions energy technologies appears to remain a key obstacle to their uptake, and that households are willing to pay a small but positive premium for electricity produced with fewer emissions. The presence of cross-country differences in behaviours and preferences signals the importance of considering local factors in approaches to energy policies. Environmental concern and environmental motivation increase engagement in sustainable choices, pointing to the cross-cutting relevance of policy efforts to improve environmental knowledge and awareness. |
| Keywords: | energy conservation, energy efficiency, household behaviour, residential energy consumption |
| JEL: | D12 D91 Q40 Q42 Q54 C25 |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:oec:envaaa:247-en |
| By: | OECD |
| Abstract: | This paper discusses recent developments in Artificial Intelligence (AI), particularly generative AI, which could positively impact many markets. While it is important that markets remain competitive to ensure their benefits are widely felt, the lifecycle for generative AI is still developing. This paper focuses on three stages: training foundation models, fine-tuning and deployment. It is too early to say how competition will develop in generative AI, but there appear to be some risks to competition that warrant attention, such as linkages across the generative AI value chain, including from existing markets, and potential barriers to accessing key inputs such as quality data and computing power. Several competition authorities and policy makers are taking actions to monitor market developments and may need to use the various advocacy and enforcement tools at their disposal. Furthermore, co-operation could play an important role in allowing authorities to efficiently maintain their knowledge and expertise. |
| Date: | 2024–05–24 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:18-en |
| By: | Mario Liebensteiner; Jakob Losert; Sarah Necker; Florian Neumeier; Jörg Paetzold; Sebastian Wichert |
| Abstract: | In 2022, Germany introduced a temporary 9-euro monthly ticket for unlimited local and regional public transport. We investigate its impact on mobility patterns, including increased public transport usage, reduced car traffic, and rail network congestion. Using difference-in-difference and event-study analyses with GPS-based mobility, traffic volume, and rail traffic data, we find limited substitution between transportation modes, a strong increase in leisure train journeys, and notable adverse effects on rail infrastructure quality. These effects dissipate after the ticket’s expiration. Our study suggests caution regarding the expected environmental benefits of nearly fare-free ’go-anywhere’ public transport tickets, which are discussed in several countries. |
| Keywords: | fare-free public transport, mobility patterns, traffic volume, mode choice, transport subsidies |
| JEL: | R12 R41 R42 R48 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11229 |
| By: | Babina, Tania (Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)); Barkai, Simcha (Boston College); Jeffers, Jessica (HEC Paris); Karger, Ezra (Federal Reserve Bank of Chicago); Volkova, Ekaterina (University of Melbourne - Faculty of Business and Economics) |
| Abstract: | We hand-collect and standardize information describing all 3, 055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries. |
| Keywords: | antitrust enforcement; economic activity; employment; business formation |
| JEL: | E24 J21 K21 L40 |
| Date: | 2023–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1488 |
| By: | Robert W. Hahn; Nathaniel Hendren; Robert D. Metcalfe; Ben Sprung-Keyser |
| Abstract: | What are the most effective ways to address climate change? This paper extends and applies the marginal value of public funds (MVPF) framework to help answer this question. We examine 96 US environmental policy changes studied over the past 25 years. These policies span subsidies (wind, residential solar, electric and hybrid vehicles, vehicle retirement, appliance rebates, weatherization), nudges (marketing, energy conservation), and revenue raisers (fuel taxes, cap and trade). For each policy, we draw upon quasi-experimental or experimental evaluations of causal effects and translate those estimates into an MVPF. We apply a consistent translation of these behavioral responses into measures of their associated externalities and valuations of those externalities. We also provide a new method for incorporating learning-by-doing spillovers. The analysis yields three main results: First, subsidies for investments that directly displace the dirty production of electricity, such as production tax credits for wind power and subsidies for residential solar panels, have higher MVPFs (generally exceeding 2) than all other subsidies in our sample (with MVPFs generally around 1). Second, nudges to reduce energy consumption have large MVPFs, with values above 5, when targeted to regions of the US with a dirty electric grid. By contrast, policies targeting areas with cleaner grids such as California and the Northeast have substantially smaller MVPFs (often below 1). Third, fuel taxes and cap-and-trade policies are highly efficient means of raising revenue (with MVPFs below 0.7) due to the presence of large environmental externalities. We contrast these conclusions with those derived from more traditional cost-per-ton metrics used in previous literature. |
| JEL: | H0 Q5 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32728 |
| By: | Robert J. Barro |
| Abstract: | The Hotelling locational model and its adaptations to a circular city provide a core framework for research in industrial organization. The present paper expands the explanatory power of this model by incorporating a continuum of consumers with constant-elasticity demand functions along with stores that have constant marginal costs of production. The stores are evenly spaced in equilibrium. The model generates a simple formula in which the markup of price over marginal cost depends on the spacing between stores and a transportation-cost parameter but is independent of the elasticity of demand. This result reflects pricing decisions by stores that factor in the threat of losing business entirely at the borders with neighboring stores. The free-entry solutions for the number of stores and their spacing approximate socially optimal values but quantities of goods consumed are inefficiently low. |
| JEL: | L1 L12 L13 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32660 |
| By: | Mark Fenwick; Erik P. M. Vermeulen; Marcelo Corrales Compagnucci |
| Abstract: | Identifying and then implementing an effective response to disruptive new AI technologies is enormously challenging for any business looking to integrate AI into their operations, as well as regulators looking to leverage AI-related innovation as a mechanism for achieving regional economic growth. These business and regulatory challenges are particularly significant given the broad reach of AI, as well as the multiple uncertainties surrounding such technologies and their future development and effects. This article identifies two promising strategies for meeting the AI challenge, focusing on the example of Fintech. First, dynamic regulation, in the form of regulatory sandboxes and other regulatory approaches that aim to provide a space for responsible AI-related innovation. An empirical study provides preliminary evidence to suggest that jurisdictions that adopt a more proactive approach to Fintech regulation can attract greater investment. The second strategy relates to so-called innovation ecosystems. It is argued that such ecosystems are most effective when they afford opportunities for creative partnerships between well-established corporations and AI-focused startups and that this aspect of a successful innovation ecosystem is often overlooked in the existing discussion. The article suggests that these two strategies are interconnected, in that greater investment is an important element in both fostering and signaling a well-functioning innovation ecosystem and that a well-functioning ecosystem will, in turn, attract more funding. The resulting synergies between these strategies can, therefore, provide a jurisdiction with a competitive edge in becoming a regional hub for AI-related activity. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.19439 |
| By: | Oliver Hülsewig; Armin Steinbach |
| Abstract: | Banking regulation invites banks to gamble when buying government bonds that regulators consider to be risk-free. The adverse effects on financial stability are known. In turn, this study shows that governments have an incentive to use banking regulation in order to enhance their fiscal leeway. We examine an unintended side-effect of banking regulation, namely the zero-risk weighting of sovereign bonds, which leads to lower costs of borrowing, encourages over-borrowing, and undermines constitutional fiscal rules. Our empirical analysis, by estimating local projections, examines the reaction of the fiscal balance in euro area periphery countries to a restrictive macroprudential capital regulation shock. We find that, unlike in the US, euro area banks’ share of domestic government bond holdings increases after the shock. This feeds into cheaper and more government borrowing laying bare the undesired interaction between banking regulation and constitutional rules. By comparing the US with the European Union, there is plausibility that the US implemented regulatory treatment and fiscal constitutional rules in a fashion that is better able to minimize the negative spillovers from banking regulation on sovereign borrowing. By contrast, the EU would benefit from more risk-based macroprudential regulation and a more credible constitutional no-bailout regime for sub-federal entities. |
| Keywords: | banking regulation, constitutional fiscal rules, sovereign-bank nexus |
| JEL: | C33 G28 H63 K33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11190 |
| By: | Pouya Janghorban; Temilade Sesan; Muhammad-Kabir Salihu; Olayinka Ohunakin; Narges Chinichian |
| Abstract: | Rural electrification initiatives worldwide frequently encounter financial planning challenges due to a lack of reliable market insights. This research delves into the preferences and marginal willingness to pay (mWTP) for upfront electricity connections in rural and peri-urban areas of Nigeria. We investigate discrete choice experiment data gathered from 3, 599 households and 1, 122 Small to Medium-sized Enterprises (SMEs) across three geopolitical zones of Nigeria, collected during the 2021 PeopleSuN project survey phase. Employing conditional logit modeling, we analyze this data to explore preferences and marginal willingness to pay for electricity connection. Our findings show that households prioritize nighttime electricity access, while SMEs place a higher value on daytime electricity. When comparing improvements in electricity capacity to medium or high-capacity, SMEs exhibit a sharp increase in willingness to pay for high-capacity, while households value the two options more evenly. Preferences for the electricity source vary among SMEs, but households display a reluctance towards diesel generators and a preference for the grid or solar solutions. Moreover, households with older heads express greater aversion to connection fees, and male-headed households show a stronger preference for nighttime electricity compared to their female-headed counterparts. The outcomes of this study yield pivotal insights to tailor electrification strategies for rural Nigeria, emphasizing the importance of considering the diverse preferences of households and SMEs. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.15757 |
| By: | Kawabata, Chiaki; Takahara, Tsuyoshi |
| Abstract: | We consider an environment wherein a multidisciplinary firm providing audit (AS) and non-audit services (NAS) competes with an AS-specialty firm and a NAS-specialty firm, and show how we should intervene in the markets for AS quality improvement. We assume that the multidisciplinary firm faces the service provision restriction: it cannot provide the NAS to the clients who purchase its AS and maximize the total profit (centralized decision). We find that policies which intensify competition do not necessarily improve and may rather reduce the AS quality since such policies incentivize the multidisciplinary audit firm to earn profits in the NAS market by moving away from competing in the AS market. Moreover, the multidisciplinary firm's separation is the most effective policy for AS quality improvement, as it allows the service provider to avoid the service provision constraint and delegate their decision in audit quality. |
| Keywords: | Separation of Multidisciplinary Firm, Hotelling Model, Audit Service Competition |
| JEL: | G34 L51 M42 |
| Date: | 2024–05–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:120907 |
| By: | Mert Demirer; Ömer Karaduman |
| Abstract: | Using rich data on hourly physical productivity and thousands of ownership changes from US power plants, we study the effects of acquisitions on efficiency and underlying mechanisms. We find a 2% average increase in efficiency for acquired plants, beginning five months after acquisitions. Efficiency gains rise to 5% under direct ownership changes, with no significant change when only parent ownership changes. Investigating the mechanisms, three-quarters of the efficiency gain is attributed to increased productive efficiency, while the rest comes from dynamic efficiency through changes in production allocation. Our evidence suggests that high-productivity firms buy underperforming assets from low-productivity firms and make them as productive as their existing assets through operational improvements. Finally, acquired plants improve their performance beyond efficiency by increasing output and reducing outages. |
| JEL: | L22 L25 L40 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32727 |
| By: | Hendrik Döpper; Alexander MacKay; Nathan H. Miller; Joel Stiebale |
| Abstract: | We characterize the evolution of markups for consumer products in the United States from 2006 to 2019. Using detailed data on prices and quantities for products in more than 100 distinct product categories, we estimate flexible demand systems and recover markups under an assumption that firms set prices to maximize profit. Our empirical strategy obtains a panel of consumer preferences and marginal costs based on the estimation of separate random coefficient models by category and year. We find that markups increased by about 30 percent on average over the sample period. The change is primarily attributable to decreases in marginal costs, as real prices only increased slightly from 2006 to 2019. Our estimates indicate that consumers have become less price sensitive over time. |
| JEL: | D20 D40 L10 L2 L81 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32739 |
| By: | OECD |
| Abstract: | Recent AI technological advances, particularly the rise of generative AI, have raised many data governance and privacy questions. However, AI and privacy policy communities often address these issues independently, with approaches that vary between jurisdictions and legal systems. These silos can generate misunderstandings, add complexities in regulatory compliance and enforcement, and prevent capitalising on commonalities between national frameworks. This report focuses on the privacy risks and opportunities stemming from recent AI developments. It maps the principles set in the OECD Privacy Guidelines to the OECD AI Principles, takes stock of national and regional initiatives, and suggests potential areas for collaboration. The report supports the implementation of the OECD Privacy Guidelines alongside the OECD AI Principles. By advocating for international co-operation, the report aims to guide the development of AI systems that respect and support privacy. |
| Keywords: | Artificial intelligence, privacy |
| Date: | 2024–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:22-en |
| By: | Guio, Armando |
| Abstract: | The report examines the development and impact of regulatory sandboxes in low- and middle-income countries. With a focus on understanding the viability and effectiveness of these innovative spaces, it provides a comprehensive analysis aimed at policymakers, international organizations and national authorities considering regulatory sandboxes for new sectors and technologies. Key insights include the emergence of regulatory sandboxes as vital tools for grappling with disruptive technologies, such as artificial intelligence, 5G and cryptocurrencies. Originally popularized by financial authorities in high-income countries, the adoption of sandboxes has expanded, prompting an investigation into their tangible benefits across various economies. The report highlights the need for a meticulous assessment of the readiness and potential impact of sandboxes and introduces the Regulatory Sandbox Maturity Assessment (RESMA) tool, which is designed to evaluate a country’s preparedness for such initiatives. Through case studies and interviews with public officials, the report emphasizes the importance of a clear policy framework, interdisciplinary teams and sustained efforts to ensure the success and impact of regulatory sandboxes. Furthermore, it stresses the significance of strategic partnerships and collaborative implementation to enhance the efficacy of these spaces for regulatory experimentation. |
| Date: | 2024–07–19 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col022:80496 |
| By: | OECD |
| Abstract: | In 2019, the OECD Council adopted the Recommendation on Artificial Intelligence (the “OECD AI Principles”). These include five values-based principles and five recommendations for OECD countries and adhering partner economies to promote responsible and trustworthy AI policies. This report takes stock of initiatives launched by countries worldwide to implement the OECD AI Principles which were reported to the OECD.AI Policy Observatory as of May 2023. It provides an overview of national AI strategies, including their oversight and monitoring bodies, expert advisory groups, as well as their monitoring and evaluation frameworks. It also discusses the various regulatory approaches that countries are adopting to ensure AI trustworthiness, such as ethics frameworks, AI-specific regulations, and regulatory sandboxes. Additionally, the report offers policy examples for each of the ten OECD AI Principles to facilitate cross-learning among policymakers. |
| Date: | 2023–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:3-en |
| By: | Diane Coyle (Bennett Institute for Public Policy, The Productivity Institute); John McHale (University of Galway); Ioannis Bournakis (SKEMA Business School, Université CÈ te d’ Azur); Jen-Chung Mei (Bennett Institute for Public Policy, University of Westminster) |
| Keywords: | Markups, manufacturing, superstars |
| JEL: | D22 D24 D42 D43 E24 O47 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:anj:wpaper:047 |