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on Regulation |
| By: | Claudia Salim |
| Abstract: | We consider a model of a monopolistic network operator who sequentially offers two-parted access charges to symmetric downstream firms. We are particularly interested in analyzing an alternative to current regulatory practice of prescribing access. In particular, we look at the possibility of restraining the input monopolist's market power by endowing downstream firms with a regulatory option: In case they disagree with the contracts proposed to them, downstream firms can claim a regulated access price. It turns out that this form of regulation may prevent foreclosure even though allowing for price discrimination in the intermediary market. It proves itself more beneficial to welfare than the current practice of prescribing access prices above marginal cost. Interestingly, even though one expects discrimination against the first mover, non-discriminatory input prices below cost can occur when the monopolist faces the alternative of a rather strictly cost-oriented regulated access price. Non-discrimination rules will either not become effective or result in less optimal price levels. |
| Keywords: | Price discrimination, vertical contracting, exclusion, regulatory outside option |
| JEL: | D43 L13 L14 L42 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp731&r=reg |
| By: | Straub, Stephane; Guasch, Jose Luis; Andres, Luis |
| Abstract: | This paper evaluates the impact of economic regulation on infrastructure sector outcomes. It tests the impact of regulation from three different angles: aligning costs with tariffs and firm profitability; reducing opportunistic renegotiation; and measuring the effects on productivity, quality of service, coverage, and prices. The analysis uses an extensive data set of about 1,000 infrastructure concessions grant ed in Latin America from the late 1980s to the early 2000s. The analysis finds that as the theory indicates, regulation matters. The empirical work here reported shows that in three relevant economic aspects-aligning costs and tariffs; dissuading renegotiations; and improving productivity, quality of service, coverage, and tariffs-the structure, institutions, and procedures of regulation matter. Thus, significant efforts should continue to be made to improve the structure, quality, and institutionality of regulation. Regulation matters for protecting both consumers and investors, for aligning closely financial returns and the costs of capital, and for capturing higher levels of benefits from the provision of infrastructure services by the private sector. |
| Keywords: | Emerging Markets,Debt Markets,Private Participation in Infrastructure,Infrastructure Economics,Infrastructure Regulation |
| Date: | 2007–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4378&r=reg |
| By: | Cheshire, Paul; Hilber, Christian A. L. |
| Abstract: | Office space in Britain is the most expensive in the world and regulatory constraints are the obvious explanation. We estimate the ‘regulatory tax’ for 14 British office locations from 1961 to 2005. These are orders of magnitude greater than estimates for Manhattan condominiums or office space in continental Europe. Exploiting the panel data, we provide strong support for our hypothesis that the regulatory tax varies according to whether an area is controlled by business interests or residents. Our results imply that the cost of the 1990 change converting commercial property taxes from a local to a national basis – transparently removing any fiscal incentive to permit local development – exceeded any plausible rise in local property taxes. |
| Keywords: | Land use regulation; regulatory costs; business taxation; office markets. |
| JEL: | H3 Q15 J6 R52 |
| Date: | 2007–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5435&r=reg |
| By: | Rasha Ahmed (University of Connecticut); Kathleen Segerson (University of Connecticut) |
| Abstract: | The paper investigates alternative policies to regulate emissions from polluting product markets, specifically considering the case of the automobiles market. The two policies we consider are: a quota that limits the quantity produced of the polluting model and a more flexible average efficiency standard that requires a minimum energy efficiency across all models produced by a firm, similar to the US Corporate Average Fuel Economy (CAFE) standards. We use a duopoly model of vertical differentiation where firms produce both an economy (i.e., low polluting) version and a luxury (i.e., high polluting) version of a given product. We show that while a quota can raise firm profit over a certain range, CAFE always reduces firm profit relative to the pre-regulation. We also show that while the quota reduces emissions, it is possible that emissions increase under CAFE. The optimal policy choice will depend on the magnitude of unit damages. We show that when unit damages are sufficiently high, the quota policy is more efficient than the average efficiency standard. This suggests that instead of tightening CAFE to limit damages from emissions, policy makers can shift to a quota policy which is both welfare enhancing and more profitable for firms. |
| Keywords: | automobiles market, emission control, green markets, energy/fuel efficiency |
| JEL: | Q48 Q58 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2007-40&r=reg |
| By: | Jo Seldeslachts; Joseph A. Clougherty; Pedro Pita Barros |
| Abstract: | Antitrust policy involves not just the regulation of anti-competitive behavior, but also an important deterrence effect. Neither scholars nor policymakers have fully researched the deterrence effects of merger policy tools, as they have been unable to empirically measure these effects. We consider the ability of different antitrust actions - Prohibitions, Remedies, and Monitorings - to deter firms from engaging in mergers. We employ cross-jurisdiction/pan-time data on merger policy to empirically estimate the impact of antitrust actions on future merger frequencies. We find merger prohibitions to lead to decreased merger notifications in subsequent periods, and remedies to weakly increase future merger notifications: in other words, prohibitions involve a deterrence effect but remedies do not. <br> <br> <i>ZUSAMMENFASSUNG - (Auflagen heute, Untersagung morgen: Abschreckungswirkung von Wettbewerbs-intrumenten) <br>Wettbewerbspolitik ist nicht nur Regulierung von wettbewerbsfeindlichem Verhalten, sondern hat auch eine wesentliche Abschreckungswirkung. Weder Wissenschaftler noch politische Entscheidungsträger haben die Abschreckungswirkung von Wettbewerbspolitik vollständig untersucht, da es sehr schwierig ist diese Wirkung empirisch nachzuweisen. Wir untersuchen die Wirkung verschiedener wettbewerbspolitischer Maßnahmen - Untersagung, Auflagen und Monitoring - um Unternehmen von Zusammenschlüssen abzuhalten. Wir nutzen einen Panel-Datensatz, um den Einfluss von Wettbewerbspolitik auf die künftige Anzahl von Firmenzusammenschlüssen zu bewerten. Wir zeigen, dass die Untersagung von Zusammenschlüssen die Fusionsankündigung in der Zukunft reduziert, und dass Fusionsauflagen künftige Ankündigungen schwach ansteigen lassen. Anders gesagt: Untersagungen haben eine führen zu Abschreckungswirkung, Auflagen nicht.</i> |
| Keywords: | merger policy tools, deterrence effects, cross-section/time-series data |
| JEL: | L40 L49 K21 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:wzb:wzebiv:spii2007-02&r=reg |
| By: | AMBEC Stefan (LERNA, TSE); SEBI Carine |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:07.20.241&r=reg |
| By: | Hülya Eraslan; Wenli Li; Pierre-Daniel G. Sarte |
| Abstract: | By compiling a novel dataset from bankruptcy court dockets recorded in Delaware between 2001 and 2002, we build and estimate a structural model of Chapter 13 bankruptcy. This allows us to quantify how key debtor characteristics, including whether they are experiencing bankruptcy for the first time, their past due secured debt at the time of filing, and income in excess of that required for basic maintenance, affect the distribution of creditor recovery rates. The analysis further reveals that changes in debtors' conditions during bankruptcy play a nontrivial role in governing Chapter 13 outcomes, including their ability to obtain a financial fresh start. Our model then predicts that the more stringent provisions of Chapter 13 recently adopted, in particular those that force subsets of debtors to file for long-term plans, do not materially raise creditor recovery rates but potentially make discharge less likely for that subset of debtors. This finding also arises in the context of alternative policy experiments that require bankruptcy plans to meet stricter standards in order to be confirmed by the court. |
| Keywords: | Bankruptcy |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:07-05&r=reg |