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on Regulation |
| By: | Miyuki Taniguchi (Graduate School of Economics, Keio University) |
| Abstract: | This study aims to measure the impact of liberalization on the efficiency of electricity production in Japan, and to examine whether or not economies of scope exist between electricity generation and transmission. Since 1995, liberalization of the electricity market in Japan has been phased in and regulations on entry have been relaxed three times. One motivation for these regulatory changes has been to improve the efficiency of electricity production by introducing competition. Using a panel data set on the nine main power companies in Japan over the period 1970-2010, fixed-effects and stochastic frontier estimates of the cost function are obtained and compared. Estimates of the cost function show that liberalization has improved cost efficiency. Economies of scope are found to exist for all firms. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:kei:dpaper:2012-027&r=reg |
| By: | Klumpp, Tilman (University of Alberta, Department of Economics); Su, Xuejuan (University of Alberta, Department of Economics) |
| Abstract: | We examine the incentives of access-regulated firms to invest in infrastructure facilities they must share with competitors. The non-strategic incentives imply that investment depends positively on the market size. The strategic incentives imply that investment also depends on market composition, namely, the market shares of the facility owner and its competitors. Using a dataset of regulated electric utilities in the United States, we find evidence that transmission investments are indeed made strategically. Ceteris paribus, utilities are less likely to invest, and investment levels are lower, when competitors occupy a larger share of the market. |
| Keywords: | infrastructure investment; network industries; open access; access regulation; electricity wholesale market |
| JEL: | D21 D22 D43 K23 L43 L94 |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2013_002&r=reg |
| By: | Almut E. D. Veraart (Imperial College London and CREATES); Luitgard A. M. Veraart (London School of Economics) |
| Abstract: | Risk premia between spot and forward prices play a key role in energy markets. This paper derives analytic expressions for such risk premia when spot prices are modelled by Lévy semistationary processes. While the relation between spot and forward prices can be derived using classical no-arbitrage arguments as long as the underlying commodities are storable, the situation changes in the case of electricity. Hence, in an empirical study based on electricity spot prices and futures from the European Energy Exchange market, we investigate the empirical behaviour of electricity risk premia from a statistical perspective. We find that a model-based prediction of the spot price has some explanatory power for the corresponding forward price, but there is a significant additional amount of variability, the risk premium, which needs to be accounted for. We demonstrate how a suitable model for electricity forward prices can be formulated and we obtain promising empirical results. |
| Keywords: | Lévy semistationary process, energy market, spot price, forward price, futures, risk premia, stochastic volatility, European Energy Exchange market. |
| JEL: | C10 C51 G00 G13 |
| Date: | 2013–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2013-02&r=reg |
| By: | Crawford, Gregory S. |
| Abstract: | The market for multi-channel video programming has undergone considerable change in the last 15 years. Direct-Broadcast Satellite service, spurred by 1999 legislation that leveled the playing field with cable television systems, has grown from 3% to 33% of the U.S. MVPD (cable, satellite, and telco video) market. Telephone operators have entered in some parts of the US and online video distributors are a growing source of television viewing. This chapter considers the merits of cable television regulation in light of these developments. It surveys the dismal empirical record on the e.ects of price regulation in cable and the more encouraging but incomplete evidence on the benefits of satellite and telco competition. It concludes with a consideration of four open issues in cable markets: horizontal concentration and vertical integration in the programming market, bundling by both cable systems and programmers, online video distribution, and temporary programming blackouts from failed carriage negotiations for both broadcast and cable programming. While the distribution market is clearly now more competitive, concerns in each of these areas remain. JEL classification: L50 ; L43 ; L41 ; L42 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1004&r=reg |
| By: | Bataille, Marc; Steinmetz, Alexander |
| Abstract: | This paper analyzes the effect of inter urban buses competing on a few routes against trains within an established railway network. In line with expectations, we show that this can lead to unprofitable train service on these routes. However, within an established railway network with every track being profitable, competition on just some tracks can result in a collapse of the entire network. External effects of individual routes on the railway network are fundamental for the profitability of the network. Hence, weakening these network effects might be crucial. As a result, efficient intermodal competition on some routes might cause the abandoning of other routes that are not facing any competition. This effect has to be taken into account by political actors when liberalization of inter urban bus travel is considered. -- |
| Keywords: | Transportation,intermodal competition,network effects |
| JEL: | K2 L1 L5 R4 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:84&r=reg |
| By: | John Vickers |
| Abstract: | Where do we stand, five years on from the start of the crisis, on progress towards banking reform? Major advances have been made, but a lot of unfinished business remains, notably on structural reform of banks. Following a stock-take of current reform initiatives, the paper reviews some economics of public policy towards banks, starting with the rationale for deposit guarantees and lender-of-last-resort support but concentrating on why governments feel compelled to provide solvency support in crisis. It then covers the economics of capital requirements – and loss-absorbency more generally – and examines why such regulation is a better approach than taxation to address systemic risk externalities, and why the public interest requires much more capital than banks would choose. The role of structural regulation in making banking systems safer is then analysed, in particular forms of separation between retail and investment banking such as ring-fencing (as in current UK reforms) and complete separation (as in the US before the repeal of Glass-Steagall). The paper concludes with some reflections on the wider European policy debate in the light of the Liikanen Report on structural reform. A central theme of the analysis is that banking reform needs a well-designed combination of policies towards loss-absorbency and structural reform. |
| Keywords: | Banking, bail-outs, capital requirements, deposit guarantees, Glass-Steagall, resolution, ring-fencing, structural reform, Volcker rule |
| JEL: | G21 G28 L51 |
| Date: | 2012–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:632&r=reg |
| By: | Kamal Saggi (Department of Economics, Vanderbilt University) |
| Abstract: | We develop a North-South model in which a firm that enjoys monopoly status in the North (by virtue of a patent or a trademark) has the incentive to price discriminate internationally because Northern consumers value its product more than Southern ones. While North's policy regarding the territorial exhaustion of intellectual property rights (IPR) determines whether the firm can exercise market power across regions, Southern policy regarding the protection of IPR determines the firm's monopoly power within the South. In equilibrium, each region's policy takes into account the firm's pricing strategy, its incentive to export, and the other region's policy stance. Major results are: (i) the North is more likely to choose international exhaustion if the South protects IPR whereas the South is more willing to offer such protection if the North implements national exhaustion; (ii) the firm values IPR protection less than the freedom to price discriminate internationally if and only if its quality advantage over Southern imitators exceeds a certain threshold; and (iii) requiring the South to protect IPR increases global welfare iff such protection is necessary for inducing the firm to export to the South. |
| Keywords: | Exhaustion of IPRs, Imitation, Market power, TRIPS, Welfare |
| JEL: | D6 |
| Date: | 2012–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:vuecon-12-00005&r=reg |
| By: | Aurelio Volpe (CSIL Centre for Industrial Studies); Stefania Pelizzari (CSIL Centre for Industrial Studies); Gelsomina Catalano |
| Abstract: | This market research aims to provide an overview of the Eco Building (or Green) activity in the European market. Energy efficiency is today at the top of the European political agenda, as from the analysis of chapter one (Legal Framework). It is part of the triple goal of the '20-20-20' initiative adopted by the European Union in 2008, which aims to achieve by 2020 a saving of 20% in primary energy consumption, a reduction of 20% in greenhouse gas emissions and an increase of 20% in renewable resources of energy. The CSIL multiclient report The European Market for Eco building products is the result of: analysis of the legislative frame network at the EU level (first chapter); analysis of the existing stock of available statistics on the building activity in Europe (most of it is reported in the second chapter of the Report); a number of simplified simulations of cost/benefit analyses for specific actions on energy saving, for residential and commercial buildings; desk research and field research (this last on the Italian market);data mining (turnover, employees, web address) for a wide number of industrial companies involved in Eco-building. Countries covered from the statistical analysis (building and economic indicators): Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Spain, Sweden, United Kingdom. The attached Excel spreadsheet is useful for the qualitative calculation of both the energy and the economic savings of the main actions that can be taken, making some assumptions. Chapter 5 shows the last available turnover, employment, web address for over 1000 players in this field, according to different categories: architectural and engineering companies, builders and developers, manufacturer of prefabricated buildings, water management, photovoltaic systems, renewable energy, building automation, industrial controls. |
| JEL: | L11 L15 L22 L25 L68 L73 L81 Q51 Q55 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:mst:csilre:eu23&r=reg |
| By: | Eric Bond (Department of Economics, Vanderbilt University); Kamal Saggi (Department of Economics, Vanderbilt University) |
| Abstract: | Motivated by existing multilateral rules regarding intellectual property, we develop a North-South model to highlight the dual roles price controls and compulsory licensing play in determining Southern access to a patented Northern product. The Northern patent-holder chooses whether and how to work its patent in the South (either via entry or voluntarily licensing) while the South determines the price control and whether to issue a compulsory license. The threat of compulsory licensing benefits the South and also increases global welfare when the North-South technology gap is significant. The price control and compulsory licensing are complementary instruments from the Southern perspective. |
| Keywords: | Patented Goods, Compulsory Licensing, Price Controls, Quality, Welfare |
| JEL: | F0 |
| Date: | 2012–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:vuecon-12-00006&r=reg |