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on Regulation |
| By: | Christos Genakos; Blair Yuan Lyu; Mario Pagliero |
| Abstract: | We study the retail price pass-through of four major tax changes in petroleum products using daily pricing data from gas stations on small Greek islands. We find that (i) the pass-through of the tax hikes is five times higher than for the tax decrease, (ii) the pass-through of the tax hikes increases with competition, while that of the tax decrease does not, (iii) there is significant asymmetry in the speed of price adjustments, and, (iv) the asymmetric price adjustment cannot be explained by tacit collusion, instead the evidence suggests that search is the most plausible explanation. We dedicate this paper to the loving memory of Mario Pagliero, a brilliant economist and a dear friend, who passed away too soon. |
| Keywords: | pass-through, rockets and feathers, tax incidence, gasoline market, market structure, competition |
| Date: | 2024–08–30 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2028 |
| By: | Donna, Javier; Pereira, Pedro |
| Abstract: | The 2023 Merger Guidelines (MGs) change the Agencies’ narrative regarding non-horizontal mergers. They follow a four-pronged approach: (1) They blend horizontal and non-horizontal mergers. (2) They simplify the narrative about non-horizontal mergers. (3) They consoli- date and broaden the theories of harm in non-horizontal mergers. (4) They blend economics and law analysis. In this article, we elaborate on these points. We discuss how the MGs’ an- ticompetitive presumptions apply to non-horizontal mergers, relate them to the economics literature, and provide examples. We finish discussing the economic rationale of the struc- tural presumption involving rivals’ exit concerns due to the exercise of market power and propose a path forward. |
| Keywords: | Antitrust, 2023 Merger Guidelines, Vertical Mergers, Rivals' Exit, Double Marginalization, Merger Evaluation, Competition Policy |
| JEL: | K21 K41 K42 L44 L52 |
| Date: | 2024–05–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121615 |
| By: | Bailey, Megan (University of Calgary); Brown, David P. (University of Alberta, Department of Economics); Myers, Erica (University of Calgary); Shaffer, Blake (University of Calgary); Wolak, Frank A. (Stanford University) |
| Abstract: | The growth of electric vehicles (EVs) raises new challenges for electricity systems. We implement a field experiment to assess the effect of time-of-use (TOU) pricing and managed charging on EV charging behavior. We find that while TOU pricing is effective at shifting EV charging into off-peak hours, it unintentionally induces new and larger “shadow peaks” of simultaneous charging. These shadow peaks lead to greater exceedance of local capacity constraints and advance the need for distribution network upgrades. In contrast, centrally managed charging solves the coordination problem, reducing transformer capacity requirements, and is well-tolerated by consumers in our setting. |
| Keywords: | Electric Vehicles; Regulation; Rate Design; Field Experiment |
| JEL: | L94 Q41 R40 |
| Date: | 2024–09–10 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:2024_004 |
| By: | Brown, David P. (University of Alberta, Department of Economics); Olmstead, Derek E. H. (University of Calgary); Shaffer, Blake (University of Calgary) |
| Abstract: | The electricity sector is going through a period of rapid transition with increasing decarbonization through the growth of renewable energy. In this paper, we consider the case of Alberta which has observed considerable growth in wind and solar generation capacity. We summarize the attributes of Alberta’s energy-only market design and how it interacts with increasing renewable output. We highlight emerging challenges that need to be addressed through careful market redesign and provide a summary of key market design changes that can help more cost-effectively and reliably integrate the growing renewable resources. We discuss ongoing policy developments related to Alberta’s market design. The experiences in Alberta can serve to inform market design in other jurisdictions as regulators work to enact policies to facilitate a higher renewable energy future. |
| Keywords: | Electricity Markets; Regulatory Policy; Renewables; Reliability |
| JEL: | L51 L94 Q28 Q48 |
| Date: | 2024–08–18 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:2024_003 |
| By: | Burlig, Fiona PhD; Bushnell, James PhD; Rapson, David PhD; Wolfram, Catherine PhD |
| Abstract: | The widespread adoption of electric vehicles (EV) is a centerpiece of California’s strategy to reach net-zero carbon emissions, but it is not fully known how and where EVs are being used, and how and where they are being charged. This report provides the first at-scale estimate of EV home charging. Previous estimates were based on conflicting surveys or extrapolated from a small, unrepresentative sample of households with dedicated EV meters. We combined billions of hourly electricity meter measurements with address-level EV registration records from California households, including roughly 40, 000 EV owners. The average EV increases overall household load by 2.9 kilowatt-hours per day, well under half the amount assumed by state regulators. Results imply that EVs travel less than expected on electric power, raising questions about transportation electrification for climate policy. |
| Keywords: | Social and Behavioral Sciences, Electric vehicles, electric vehicle charging, energy consumption, households, automobile ownership, low income groups |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt8c20q0rf |
| By: | Burlig, Fiona PhD; Bushnell, James PhD; Rapson, David PhD; Wolfram, Catherine PhD |
| Abstract: | The widespread adoption of electric vehicles (EV) is a centerpiece of California’s strategy to reach net-zero carbon emissions, but it is not fully known how and where EVs are being used, and how and where they are being charged. California is home to approximately half of the EVs in the United States, yet policymakers attempting to guide transportation electrification lack rigorous estimates of how much electricity EVs are actually using because the majority of EV charging occurs at home, where it is difficult to distinguish from other household uses recorded on the electricity meter. |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt1hw415dp |
| By: | Goodluck G Ntangeki (CBE - College of Business Education); Ismail A Changalima (UDOM - University of Dodoma [Tanzanie]); Scholastica N Justus (Local Government Training Institute, Dodoma, Tanzania.); Denis C Kawishe (The Open University of Tanzania) |
| Abstract: | With an increasing emphasis on ethical practices among public procurement practitioners, transparency and accountability will remain critical in ensuring effective and efficient procurement operations. This paper examines the influence of transparency and accountability in enhancing regulatory compliance in public procurement. This study was quantitative in nature and utilised a quantitative analysis approach to analyse data from 202 public procurement practitioners in Dodoma, Tanzania. The study applied structural equation modelling to examine the relationship between transparency, accountability, and regulatory compliance in public procurement. The results indicate a positive and significant relationship between transparency and regulatory compliance (β = 0.148, p = 0.048). The study also reveals that accountability is a significant and positive factor that promotes regulatory compliance (β= 0.366, p < 0.001). The study's findings offer valuable insights for public procurement practitioners to establish well-defined standards of practice concerning transparency and accountability in procurement operations, with the aim of improving regulatory compliance. The research contributes to the existing literature on enhancing procurement compliance in the public sector by exploring the role of transparency and accountability in procurement regulatory compliance in Tanzania. |
| Keywords: | Transparency, Accountability, Procurement, Regulatory compliance, Public procurement |
| Date: | 2023–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04679504 |
| By: | Bianchi, Milo; Yamashita, Takuro |
| Abstract: | We analyze the optimal investment in a common infrastructure in a market with network externalities. Taking a dynamic mechanism design perspective, we contrast the level of investment and the associated payments across firms that a budget-constrained welfare-maximizing principal would set to those emerging in an unregulated market. We consider two market scenarios: first, a nascent market in which only one firm operates and an entrant may arrive at a later stage; second, a more mature market in which two firms already operate. In these settings, the principal needs to set access fees so as to provide enough incentives to invest in the infrastructure, while also avoiding wasteful investment. At the same time, the principal needs to coordinate investment and usage of the shared network given the various externalities that each firm exerts. We highlight the relative importance of these two aspects and how regulation can be designed so as to improve social welfare. We also highlight how the optimal timing of investment depends crucially on the regulator’s coordination power. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129665 |
| By: | Chad Syverson |
| Abstract: | Interest in market power has recently surged among economists in many fields, well beyond its traditional home in industrial organization. This has focused empirical attention on markups, the ratios of price to marginal cost in product markets, and markdowns, the ratios of inputs’ marginal products to their paid wage in factor markets. In this review, I offer a conceptual overview of both metrics and survey recent research examining them. I pay particular attention to the distinct interests that microeconomists and macroeconomists have had regarding these metrics, as well as topics that have bridged and are bridging these often distinct literatures. |
| JEL: | D4 E3 L0 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32871 |
| By: | Wouter Simons; Alessandro Turrini; Lara Vivian |
| Abstract: | This discussion paper presents the key features of Artificial Intelligence (AI), highlighting the main differences with respect to previous IT and digital technologies. It presents the most relevant facts about AI diffusion across EU countries, and discusses the main economic implications, focusing especially on its impact on productivity and labour markets. While AI presents a formidable opportunity, it also entails major challenges, with implications for policy. This paper focuses on policies to remove bottlenecks to AI development and adoption, regulatory policies, competition policy, policies to deal with labour market and distributive implications. |
| JEL: | O30 J20 J30 O40 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:210 |
| By: | Swapnil Rayal; Apurva Jain; Matthew Lorig |
| Abstract: | Each household in a population characterized by income heterogeneity faces random demand for electricity and decides if and when it should adopt a solar product, rooftop solar or community solar. A central planner, aiming to meet an adoption level target within a set time, offers net metering and subsidy on solar products and minimizes its total cost. Our focus is on analyzing the interactions of three new features we add to the literature: income diversity, availability of community solar, and consideration of adoption timing. {Methodology and results:} We develop a bilevel optimization formulation to derive the optimal subsidy policy. The upper level (planner's) problem is a constrained non-linear optimization model in which the planner aims to minimize the average subsidy cost. The lower level (household's) problem is an optimal stopping formulation, which captures the adoption decisions of the households. We derive a closed-form expression for the distribution of optimal adoption time of households for a given subsidy policy. We show that the planner's problem is convex in the case of homogeneous subsidy for the two products. {Managerial implications:} Our results underscore the importance for planners to consider three factors - adoption level target, time target, and subsidy budget - simultaneously as they work in tandem to influence the adoption outcome. The planners must also consider the inclusion of community solar in their plans because, as we show, community and rooftop solar attract households from different sides of the income spectrum. In the presence of income inequality, the availability of community makes it easier to meet solar adoption targets. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.11970 |
| By: | Kim, Hyunsoo (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Yea, Sangjun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kang, Minji (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 이 연구에서는 데이터가 디지털플랫폼 경쟁에 미치는 영향을 살펴본다. 디지털플랫폼이 사업을 운영하면서 획득한 사용자 데이터를 통해 서비스의 질적 향상에 기여한다면, 시장경쟁에 어떤 영향을 미치는지에 대해 동태분석한다. 연구결과를 바탕으로 데이터 독점으로 인한 글로벌 디지털플랫폼의 시장 지배력을 완화하고 디지털 생태계의 개방성을 보호하기 위한 정책을 수립하는 데 고려해야 할 사항을 제시한다. Recent regulatory proposals on competition in digital markets, such as the EU's Digital Markets Act and Digital Services Act, emphasize the importance of ensuring fair competition in markets to sustain innovation and avoid long-term monopolies. There is a growing concern that markets are becoming increasingly concentrated, with a small number of data-rich companies gaining prominent positions in horizontally or vertically linked markets and large user bases. This report identifies considerations for introducing policies to mitigate the market power of data-rich global digital platforms and protect the openness of digital ecosystems for potential new entrants. To this end, we examine data-related regulatory trends in major countries and theoretically discuss the implications for inter-platform competition when data gives digital platforms a competitive advantage. We then focus on data portability, the most prominent data-related regulation of digital platforms, to explore the impact of data portability regulation on digital platform competition. This study largely consists of five main parts. Chapter 2 outlines the basic characteristics of the platform economy, including its multi- sided nature and indirect network effects, and describes the role of data in the platform economy, in order to better understand the discussion that follows. Indirect externalities are prominent in digital platforms, which are intermediaries that allow multiple independent groups of economic actors to interact through digital connectivity, due to their two-sided market nature. If one side can initially attract a certain number of people to the platform, it becomes easier for both sides to attract additional platform users in a virtuous cycle through indirect network effects, making it easier for market tipping than in other markets. In these digital platform markets, data is utilized to improve the quality of services provided by the digital platforms and to expand their user base. Digital platforms collect, process, and analyze personal-level data generated from users' interactions with the platform after obtaining their consent. As more data is accumulated, search and recommendation results are tailored to the user, which increases the utility or profitability of the platform for both users and merchants. Digital platforms can also collect and use data to create new business opportunities. By merging with other digital platforms, or by entering the market for complementary services, digital platforms can create additional commercial value by combining their own data with that of other platforms. (the rest omitted) |
| Keywords: | data concentration; digital platforms; regulation; platform economy |
| Date: | 2023–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieppa:2023_030 |
| By: | Audi, Marc; Al-Masri, Razan |
| Abstract: | The relationship between decision-making and risk carries significant implications, particularly within the context of financial institutions. Understanding the causal connection between these two factors is essential, especially when considering the broader implications of social responsibility. This is especially true in sectors where legal and regulatory frameworks are not sufficiently predictive or comprehensive. Recognizing the foundational elements of risk is crucial for problem identification and the effective allocation of resources to mitigate these risks. In our study, we explored this relationship by focusing on 100 commercial banks operating in emerging markets over the period from 2004 to 2023. The aim was to empirically test the effects of various factors, including regulatory frameworks, competitive pressures, and ownership structures, on the risk-taking behaviors of these banks. We specifically examined the behaviors both before (ex-ante) and after (ex-post) the provision of credit. To conduct this analysis, we employed two models i.e. the Z-Score and the Non-Performing Loan ratio, utilizing panel data for our assessments. The Z-Score is a well-established metric that gauges the stability and insolvency risk of financial institutions, while the NPL ratio serves as an indicator of the quality of a bank's loan portfolio, reflecting the proportion of loans that are in default or close to default. Our findings indicate that regulatory measures have a significant impact on the risk-taking behavior of banks. Stricter regulations tend to reduce risk-taking by imposing constraints and ensuring greater oversight. Conversely, high levels of competition can drive banks to take on more risk, as they strive to maintain or expand their market share. Ownership structures also play a critical role, with different ownership models influencing the risk appetite of banks in varying ways. This study underscores the importance of a balanced approach to regulation and competition within the banking sector. Effective regulatory frameworks, coupled with a keen understanding of competitive dynamics and ownership structures, can help mitigate risks and promote more stable financial environments in emerging markets. Our research provides valuable insights for policymakers, regulators, and banking executives aiming to foster safer banking practices and enhance the overall stability of the financial system. |
| Keywords: | Decision Making, Risk Management, Financial Regulation |
| JEL: | D81 G21 G28 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121587 |
| By: | Bianchi, Milo; Rhodes, Andrew |
| Abstract: | We consider a model in which consumers live in isolated villages and need to send money to each other. Each village has (at most) one digital payment provider, which acts as a bridge to other villages. With fully rational consumers interoperability is beneficial: it raises financial inclusion, which in turn increases consumer surplus. With behavioural consumers who have imperfect information or incorrect beliefs about off-net fees, interoperability can reduce consumer welfare. Policies that cap transaction fees have an ambiguous effect on consumers, depending on how the cap is implemented, whether consumers are rational, and on how asymmetric providers are in terms of coverage. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129664 |
| By: | Suguru Otani (Market Design Center, University of Tokyo and Junior Research Fellow, Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN) |
| Abstract: | I investigate how explicit cartels, known as "shipping conferences", in a global container shipping market facilitated the formation of one of the largest globally integrated markets through entry, exit, and shipbuilding investment of shipping firms. Using a novel data, I develop and construct a structural model and find that the cartels shifted shipping prices by 20-50% and encouraged firms' entry and investment. In the counterfactual, I find that cartels would increase producer surplus while slightly decreasing consumer surplus, then may increase social welfare by encouraging firms' entry and shipbuilding investment. This would validate industry policies controlling prices and quantities in the early stage of the new industry, which may not be always harmful. Investigating hypothetical allocation rules supporting large or small firms, I find that the actual rule based on tonnage shares is the best to maximize social welfare. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2024-28 |
| By: | Demary, Markus; Demary, Vera |
| Abstract: | Die Fußballspieler des FC Bayern München werben für die Kryptobörse Bitpanda, Crypto.com warb mit dem Rapper Eminem während der NBA-Playoffs der Los Angeles Lakers, deren Spielstätte im Jahr 2021 in "Crypto.com Arena" umbenannt wurde. Die Krypto-Community professionalisiert sich zunehmend. Meist stehen junge Menschen im Fokus: Denn bei den unter 35-Jährigen finden sich in Deutschland 1, 8 Millionen Kryptobesitzer im Vergleich zu 300.000 Anleihe- und 2, 8 Millionen Aktienbesitzern in dieser Altersklasse. Aufgrund der Beliebtheit von Kryptowerten bei jungen Menschen wird in diesem Policy Paper die Frage untersucht, inwieweit die EU Krypto-Anleger geschützt sind und wo noch Herausforderungen bestehen. Dabei spielt auf europäischer Ebene vor allem die Markets for Crypto Assets Regulation (MiCAR) eine Rolle für die Regulierung von Kryptowerten, die zum Beispiel Krypto-Handelsplattformen mit Sitz in der EU, aber auch andere Krypto-Dienstleistungen erfasst und für diese klare Vorgaben im Sinne des Anlegerschutzes macht. Für Finanzprodukte auf Basis von Kryptowerten kommen je nach Ausgestaltung andere Regulierungen zur Anwendung. Auch Geldwäscheprävention und Besteuerung von Kryptowerten sind inzwischen im Fokus der EU und weitestgehend geregelt. Daneben ist ein weiteres Phänomen relevant, nämlich die Werbung für Krypto-Investments über Influencer. Im Jahr 2023 haben sich etwa 10 Prozent der Erwachsenen bis 64 Jahre über Influencer zu Finanzthemen informiert, so dass auch die Regulierung von Influencern, die auf EU-Ebene nicht zentral, sondern in vielen Einzelvorschriften geregelt ist, von Relevanz für die Analyse ist. [...] |
| Abstract: | FC Bayern Munich footballers advertise for the crypto exchange Bitpanda, Crypto.com advertised with rapper Eminem during the NBA playoffs of the Los Angeles Lakers basketball team, whose arena was renamed "Crypto.com Arena" in 2021. The crypto community is becoming increasingly professionalized. The focus is mostly on young people: in Germany, there are 1.8 million crypto holders in the under-35 age group compared to 300, 000 bond holders and 2.8 million share holders in this age group. Due to the popularity of crypto assets among young people, this policy paper therefore examines the extent to which the EU protects crypto investors and where challenges still exist. At European level, the Markets for Crypto Assets Regulation (MiCAR) in particular plays a role in the regulation of crypto assets, which covers crypto trading platforms based in the EU, for example, but also other crypto services and sets clear requirements for these in terms of investor protection. Other regulations apply to financial products based on crypto assets, depending on their structure. The prevention of money laundering and taxation of crypto assets are now also the focus of the EU and are largely regulated. Another phenomenon is also relevant, namely the advertising of crypto investments via influencers. In 2023, around 10% of adults up to the age of 64 will have obtained information on financial topics via influencers, meaning that the regulation of influencers, which is not regulated centrally at EU level but in many individual regulations, is also relevant to the analysis. [...] |
| Keywords: | Digitalisierung, Europäische Union, Finanzmarkt, Geldpolitik, Unternehmen und Märkte |
| JEL: | E42 E44 E51 L51 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkpps:302188 |