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on Regulation |
| By: | Emma Aisbett; Carol McAusland |
| Abstract: | An adversarial game is used to model the amount of influence a firm has over a government regulator, and its equilibrium level of regulation, as a function of firm fundamentals. The effective influence of a firm is identified as comprising both intrinsic and exerted components; where the latter involves distorting regulation via a transfer to the regulator. Understanding the source of a firm's high influence is found to be important for -among other things - predicting whether it faces higher or lower regulatory constraint than other firms. Data from the World Business Environment Survey provides strong evidence in support of model hypotheses across a wide range of government agents, countries, and regulatory areas. Of particular relevance to public debate, large firms are found to be more likely to be influential, but also more likely to experience regulatory constraint than smaller firms. |
| Keywords: | Political Economy; Regulation; Influence |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:649&r=reg |
| By: | Matei, Lucica; Matei, Ani |
| Abstract: | The concepts and approaches of public marketing are moreover used and quantified in the national and European public systems. Adapted, with behaviours specific to the public system, the fundamental concepts of marketing represent a component of “the new culture of public service”. The paper aims to present aspects concerning the use of the fundamental concepts of public marketing - service, market, placement -, in the European decision-making practice, respectively in the regulatory framework of the single market, in the framework of providing public goods and services in the European space. The paper emphasizes the impact of the application of infringement procedures during 1996-2010 on the market of services and satisfaction of citizens’ needs. The regulation of the single market, the practices and „rules” of organisation and functioning are favouring the achievement of the economic and social function of the services of general interest, supporting the functionality of the internal market. The contribution of this paper consists in the analysis of the European regulations, of the content of procedures for sanctioning the EU Member States concerning the market and services from the prospect of the concepts of marketing, market, services, placement, satisfaction of public needs as well as of their interpretation |
| Keywords: | public service; market; consumer; regulation; infringement procedure |
| JEL: | L32 M31 N70 |
| Date: | 2011–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31470&r=reg |
| By: | Manuel Frondel; Steffen Lohmann |
| Abstract: | Since September 2009, Regulation 244/2009 of the European Commission enforces the gradual phase-out of incandescent light bulbs. As of September 2012, only energyefficient lighting sources will be allowed for sale. Among these are halogen light bulbs, light-emitting diodes (LED), or compact fluorescent light bulbs? often referred to as energy-saving light bulbs. The Commission’s justification for the phase-out of conventional light bulbs maintains that a reduction in the electricity consumed will not only lead to lower energy cost for private households and industrial consumers, but at the same time lead to a decrease in greenhouse gas emissions. This article discusses possible reasons for the slow market diffusion of energy-saving light bulbs and shows that the investment in energy-efficient light bulbs does not necessarily lead to significant cost reductions. Drawing on some illustrative examples, we demonstrate that the use of cheaper incandescent bulbs instead of energy-saving light bulbs can be economically rational in cases of rather low usage times, in which the higher initial purchasing price might only pay off after very long time spans. Furthermore, due to the coexistence with the European Emissions Trading Scheme (ETS), this regulation attains no additional emission reductions beyond those achieved by the ETS alone. We thus conclude that the general ban of incandescent light bulbs is inappropriate and should be abolished by the Commission. |
| Keywords: | Energy efficiency; rebound effect |
| JEL: | D12 Q41 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0245&r=reg |
| By: | Ojo, Marianne |
| Abstract: | Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.” This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced. |
| Keywords: | counter party risks; liquidity; European Systemic Risk Board; stability; systemic risk; Shadow Banking; central banks; regulatory arbitrage; OTC derivatives; European Central Bank; supervision; coordination |
| JEL: | E0 D0 K2 D8 |
| Date: | 2011–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31319&r=reg |
| By: | Wan Liza (University of Wisconsin Madison, Wisconsin, USA and Private Law Department, IIUM) |
| Abstract: | Of late, the element of competition has posed to be a conundrum to the emerging economies; Malaysia is no exception. Selection of economies theories indicated; competition has been used in innumerable sense. Entrepreneurial competition among producers defines competition as an attempt to offer product at lower prices, in contrast to the adjective; competition policy denotes deregulation of markets with a framework that elevates market disciplines, eliminates distortion and promotes economic efficiency. In developing a competitive framework: a significant question arose; does competition policy merely generates economic efficiency? Empirical analysis on trade and communication has indicated positive impacts. However, competition in Malaysia i.e. implemented through sector regulation; for example in electricity generation has shown little changes on economic efficiency and other benefits. This paper suggests competition policy advocates economic advantages and maximization of other benefits i.e. customer welfare. Simultaneously effects business dynamics. The key to workable ‘model’ originates from strong and independent structural and administrative implementation of the policy. This research reiterates plausible arguments of the benefits i.e. competitive markets generate efficiency and allow for the reflection of true prices in the markets. Alternatively, it also highlights competition impacts on business dynamics and cognizance of Malaysian Competition Act 2010 |
| Keywords: | competition, competition policy, economic efficiency, Malaysia and Competition Act 2010 |
| JEL: | M0 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cms:2icb11:2011-114&r=reg |
| By: | Alexandra Girod (University of Nice); Olivier Bruno (University of Nice) |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1106&r=reg |
| By: | Hornuf, Lars |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:dissen:13102&r=reg |
| By: | Eckert, Heather (University of Alberta, Department of Economics); Eckert, Andrew (University of Alberta, Department of Economics) |
| Abstract: | The number of gasoline stations in Canada fell by 40 percent between 1989 and 2000. Many demand and competition related explanations have been offered for this rationalization, while industry sources cite stiffer environmental regulations as a factor in station closures. In the late 1980s and early 1990s most Canadian provinces adopted regulations requiring that unprotected petroleum storage tanks be upgraded or replaced according to a schedule based on the age of the tank and that nearby unprotected tanks also be upgraded or removed. In this paper, we exploit provincial differences in the timing of these regulations to examine the role of upgrade and removal regulations on the timing and degree of station shutdown in 12 cities across the country. |
| Keywords: | petroleum storage; rationalization; retail gasoline; underground storage tanks; environmental regulations |
| JEL: | K20 L81 Q58 |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2011_007&r=reg |
| By: | Andreea Cosnita-Langlais; Jean-Philippe Tropeano |
| Abstract: | This paper deals with the optimal enforcement of the competition law between the merger and anti-cartel policies. We examine the interaction of these two branches of the competition policy given the budget constraint of the competition agency and taking into account the ensuing incentives for firms’ behavior in terms of choice between cartels and mergers. We are thus able to conclude on the optimal competition policy mix. We show for instance that to the extent that a tougher anti-cartel action triggers more mergers taking place, the public agency will optimally invest only in control fighting for a tight budget, and then in both instruments as soon as the budget is no longer tight. However, if the merger’s coordinated effect is taken into account, then when resources are scarce the agency may optimally have to spend first on controlling mergers before incurring the cost of fighting cartels. |
| Keywords: | competition law enforcement, antitrust, merger control, anti-cartel policy |
| JEL: | L41 K21 D82 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2011-18&r=reg |
| By: | Evens Salies (Observatoire Français des Conjonctures Économiques) |
| Abstract: | La loi de nouvelle organisation des marchés de l'électricité s'inscrit dans le prolongement du processus d'ouverture à la concurrence du secteur européen de l'énergie électrique engagé par les États membres de l'Union européenne en 1996. Cette nouvelle loi, qui modifie et complète celle de février 2000, est notamment une réponse du Gouvernement à la mise en cause par les autorités européennes de la compatibilité des tarifs réglementés français avec le droit de l'Union européenne et, plus généralement, de la configuration du secteur français qui bloquerait le développement de la concurrence. C'est en réalité EDF qui est visée avec cette loi, car, du fait de sa situation historique, l'entreprise produit plus de 85 % de l'électricité et sert la quasi-totalité des clients de la France métropolitaine. Sur le marché des petits professionnels ouvert le 1er juillet 2004 (seuls 7% d'entre eux avaient quitté leur entreprise historique d'électricité trois ans plus tard), puis sur le marché résidentiel (les particuliers) ouvert le 1er juillet 2007 (environ 5% étaient en 2010 servis par des fournisseurs alternatifs), peu de clients semblent vouloir passer à la concurrence, ce qui était prévisible. |
| Keywords: | Business Economics, Cognitive & Behavioural Economics, Industrial Competition, European Economics, Energy Economics, Innovation, Marketing, Regulation |
| JEL: | D2 D4 D83 H4 L4 L5 L94 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1102&r=reg |
| By: | Fell, Harrison (Resources for the Future); Burtraw, Dallas (Resources for the Future); Morgenstern, Richard (Resources for the Future); Palmer, Karen (Resources for the Future) |
| Abstract: | Current and proposed greenhouse gas cap-and-trade systems allow regulated entities to offset abatement requirements by paying unregulated entities to abate. These offsets from unregulated entities are believed to contain system costs and stabilize allowance prices. However, the supply of offsets is highly uncertain and may be correlated with other sources of uncertainty in emissions trading systems. This paper presents a model that incorporates both uncertainties in the supply of offsets and in abatement costs. We numerically solve a dynamic stochastic model, with parameters relevant to the U.S. climate debate, under a variety of parameter settings, including a system that includes allowance price controls, risk aversion, and competitive offset purchasing. We find that as uncertainty in offsets and uncertainty in abatement costs become more negatively correlated, expected abatement plus offset purchase costs increase, as does the variability in allowance prices and emissions from the regulated sector. These results are amplified with risk sensitivity, larger annual offset limits, and competitive offset purchasing. Imposing an allowance price collar substantially mitigates cost increases as well as the variability in prices, while roughly maintaining expected environmental outcomes. In contrast with previous literature we find a collar may also mitigate emissions variability. |
| Keywords: | climate change, offsets, cap-and-trade, price collars, stochastic dynamic programming |
| JEL: | Q54 Q58 C61 |
| Date: | 2011–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-01-rev&r=reg |
| By: | Stefano Capri; Rosella Levaggi (Department of Economics, University of Brescia,Italy) |
| Abstract: | Risk sharing is becoming an increasingly popular instrument to regulate the price of new drugs. In the recent past, forms of risk-sharing agreements between the public regulator and the industry have been proposed and implemented, but their effects on price and profits are still controversial. in this paper we propose a model aimed at studying the effects on price and expected profit of several risk-sharing agreements between a regulator and the industry, based on the ex post effectiveness of the drug (i.e. the efficacy resulted in the real medical practice). We assume that the probability of being listed (approved and reimbursed) depends on the relative performance of the new drug in terms of effectiveness and budget required. The price is set according to the declared efficacy of the new drug, but if ex post the effectiveness falls short of what declared, several forms of penalties may be used by the regulator. We show that the number of patients that are treated is not necessarily affected by risk-sharing/risk-shifting mechanisms; the price for which the drug is listed may be higher than without risk-sharing, but the expected profit of the industry is: a) always lower for risk-shifting schemes; b) for true risk-sharing it depends on the bargaining power of the company. This result is however valid only if the listing process is not affected by risk sharing. If this is not the case, risk sharing mechanisms may increase the expected profit of the industry. |
| Keywords: | : Drug pricing, Risk-sharing, Efficacy, Effectiveness |
| JEL: | I11 I18 D45 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:gea:wpaper:2/2011&r=reg |
| By: | Greaker, Mads (Dept. of Economics, University of Oslo); Hoel, Michael (Dept. of Economics, University of Oslo) |
| Abstract: | Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods R&D. This in turn may be used as an argument for environmental R&D getting more public support than other R&D. In this paper we systematically compare the incentives for environmental R&D with the incentives for market goods R&D. We find that the relationship might be the opposite: When the innovator is able to commit to a licence fee before environmental policy is resolved, incentives are always higher for environmental R&D than for market goods R&D. When the government sets its policy before or simultaneously with the innovator's choice of licence fee, incentives for environmental R&D may be higher or lower than for market goods R&D. |
| Keywords: | R&D; environmental R&D; innovations; endogenous technological change |
| JEL: | H23 O30 Q55 Q58 |
| Date: | 2011–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2011_015&r=reg |
| By: | Reinhilde Veugelers |
| Abstract: | Development and deployment of clean-energy technologies is crucial if climate targets are to be met cost-effectively. The European Union already has a plan that deals with these issues: the Strategic Energy Technology Plan, which has become central to the achievement of the EU's ambitions. In a period of constrained public finances, if governments want to leverage the necessary private innovation for clean-energy technologies, they will have to provide well-designed time-consistent policies, reducing commercial and financial risk through a combination of consistent carbon pricing, regulations and public funding, which will have to give a sizable and consistent push to early-stage clean-energy technologies, with a clear exit strategy. But first and foremost, governments should establish a sufficiently high and long-term predictable carbon price. The design of the EU emissions trading system and the distribution of carbon allowances should take into account more explicitly its power to leverage innovation. A move to a 30 percent EU emissions reduction target, which would involve a tighter emissions cap and fewer allowances being auctioned, would result would result in a higher carbon price and provide greater incentives for innovation. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:561&r=reg |