nep-reg New Economics Papers
on Regulation
Issue of 2019‒05‒13
twelve papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. The mitigating role of regulation on the concentric patterns of broadband diffusion. The case of Finland By Jaume Benseny; Juuso T\"oyli; Heikki H\"amm\"ainen; Andr\'es Arcia-Moret
  2. The profitability of energy storage in European electricity markets By Spodniak, Petr; Bertsch, Valentin; Devine, Mel
  3. Strategic Environmental Policy and the Mobility of Firms By Philipp M. Richter; Marco Runkel; Robert C. Schmidt
  4. Mineral resources for renewable energy: optimal timing of energy production By Adrien Fabre; Mouez Fodhaz; Francesco Ricci
  5. Estimating the cost of capital for wind energy investments in Turkey By Gustav Fredriksson; Simone Tagliapietra; Georg Zachmann
  6. The European intraday electricity market : a modeling based on the Hawkes process By Benjamin Favetto
  7. Uncertain Commitment Power in a Durable Good Monopoly By Seres, Gyula
  8. The impacts of demand response participation in capacity markets By Lynch, Muireann A.; Nolan, Sheila; Devine, Mel T.; O'Malley, Mark
  9. The roaming regulation and the case for applying behavioural industrial organisation to EU competition policy By McGowan, Féidhlim
  10. Regulated occupations in Italy: extent and labor market effects By Sauro Mocetti; Lucia Rizzica; Giacomo Roma
  11. Rural roads and urban agglomeration economies: Benefits for town and country? By Bell Clive
  12. Non-horizontal mergers with investments into compatibility By Gregor Langus; Vilen Lipatov; Jorge Padilla

  1. By: Jaume Benseny; Juuso T\"oyli; Heikki H\"amm\"ainen; Andr\'es Arcia-Moret
    Abstract: This article analyzes the role of Finnish regulation in achieving the broadband penetration goals defined by the National Regulatory Authority. It is well known that in the absence of regulatory mitigation the population density has a positive effect on broadband diffusion. Hence, we measure the effect of the population density on the determinants of broadband diffusion throughout the postal codes of Finland via Geographically Weighted Regression. We suggest that the main determinants of broadband diffusion and the population density follow a spatial pattern that is either concentric with a weak/medium/strong strength or non-concentric convex/concave. Based on 10 patterns, we argue that the Finnish spectrum policy encouraged Mobile Network Operators to satisfy ambitious Universal Service Obligations without the need for a Universal Service Fund. Spectrum auctions facilitated infrastructure-based competition via equitable spectrum allocation and coverage obligation delivery via low-fee licenses. However, state subsidies for fiber deployment did not attract investment from nationwide operators due to mobile preference. These subsidies encouraged demand-driven investment, leading to the emergence of fiber consumer cooperatives. To explain this emergence, we show that when population density decreases, the level of mobile service quality decreases and community commitment increases. Hence, we recommend regulators implementing market-driven strategies for 5G to stimulate local investment. For example, by allocating the 3.5 GHz and higher bands partly through local light licensing.
    Date: 2019–05
  2. By: Spodniak, Petr; Bertsch, Valentin; Devine, Mel
    Date: 2018
  3. By: Philipp M. Richter; Marco Runkel; Robert C. Schmidt
    Abstract: The loss of international competitiveness of domestic industries remains a key obstacle to the implementation of effective carbon prices in a world without harmonized climate policies. We analyze countries' non-cooperative choices of emissions taxes under imperfect competition and mobile polluting firms. In our general equilibrium setup with trade, wage effects prevent all firms from locating in the same country. While under local or no pollution countries achieve the first-best, under transboundary pollution taxes are inefficiently low and lower than under autarky where only the `standard' free-riding incentive distorts emissions taxes. This effect is more pronounced when polluting firms are mobile.
    Keywords: Strategic environmental policy, firm location, carbon leakage, general equilibrium
    JEL: F12 F18 H23
    Date: 2019
  4. By: Adrien Fabre (PSE - Paris School of Economics); Mouez Fodhaz (PSE - Paris School of Economics); Francesco Ricci (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: The production of energy from renewable sources is much more intensive in minerals than that from fossil resources. The scarcity of certain minerals limits the potential for substituting renewable energy for scarce fossil resources. However, minerals can be recycled, while fossils cannot. We develop an intertemporal model to study the dynamics of the optimal energy mix in the presence of mineral intensive renewable energy and fossil energy. We analyze energy production when both mineral and fossil resources are scarce, but minerals are recyclable. We show that the greater the recycling rate of minerals, the more the energy mix should rely on renewable energy, and the sooner should investment in renewable capacity take place. We confirm these results even in the presence of other better known factors that a ect the optimal schedule of resource use: growth in the productivity in the renewable sector, imperfect substitution between the two sources of energy, convex extraction costs for mineral resources and pollution from the use of fossil resources.
    Keywords: energy transition,mineral resources,renewable and non-renewable natural resources,recycling
    Date: 2019
  5. By: Gustav Fredriksson; Simone Tagliapietra; Georg Zachmann
    Abstract: The research was carried out with the kind support of Stiftung Mercator. Wind power represents a key component of Turkey’s energy strategy. Increased investment will be required to meet Turkey’s wind power target and, as such, there is a need to understand the viability of wind power projects there. The cost of capital is a crucial element in wind power investment decisions owing to the high capital intensity of wind power plants. A reduction in the cost of capital through support policies can lower overall project costs and increase investment. We estimate the cost of capital for wind power projects in Turkey using data on 138 installations that participated in the Turkish feed-in tariff scheme in 2017. Our estimates indicate an upper bound of 12% for the cost of capital. This suggests the cost of capital for wind power projects in Turkey is not higher than in south-eastern European Union countries. However, because of adverse macroeconomic conditions, the cost of Turkey’s main renewable support scheme increased by 46% between 2016 and 2017 in Turkish lira terms. We argue that continued commitment to the current support schemes by the Turkish authorities is crucial for the development of the Turkish wind power sector.
    Date: 2019–05
  6. By: Benjamin Favetto (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article deals with the modeling of the trading activity on the European electricity intraday market by a self-exciting point process (also known as Hawkes process). It gives some empirical evidence of self-excitement, and discuss the time-homogeneity of the baseline of the process. The question of the functional shape of the intensity kernel is also adressed. Finally, a parameter estimation procedure is derived for the model with a non-constant baseline.
    Keywords: Self-exciting point process,European electricity intraday market,change-point detection,parameter estimation
    Date: 2019–04–16
  7. By: Seres, Gyula (Tilburg University, Center For Economic Research)
    Abstract: This paper considers dynamic pricing strategies in a durable good monopoly model with uncertain commitment power to set price paths. The type of the monopolist is private information of the firm and not observable to consumers. If commitment to future prices is not possible, the initial price is high in equilibrium, but the firm falls prey to the Coase conjecture later to capture the residual demand. The relative price cut is increasing in the probability of commitment as buyers anticipate that a steady price is likely and purchase early. Pooling in prices may occur for perpetuity if commitment is suciently weak. Polling for innity is also preserved if committing to a high price is endogenously chosen by the firm.
    Keywords: monopoly; commitment; Information asymmetry
    JEL: D42 L12 D61 D82
    Date: 2019
  8. By: Lynch, Muireann A.; Nolan, Sheila; Devine, Mel T.; O'Malley, Mark
    Date: 2018
  9. By: McGowan, Féidhlim
    Date: 2018
  10. By: Sauro Mocetti (Bank of Italy); Lucia Rizzica (Bank of Italy); Giacomo Roma (Bank of Italy)
    Abstract: This work provides a descriptive assessment of regulated occupations in Italy and examines the impact of regulation on the labor market. First, we construct, on the basis of law provisions, a set of novel indicators measuring both the extensive and the intensive margin of regulation. We then show that regulated occupations represent a significant and increasing fraction of total employment (24%), their incidence being significantly larger among workers with a college degree (52%). Moreover, these occupations are characterized by lower mobility and entry rates and by a wage premium of about 9%, which raises to 18% for the professioni ordinistiche. Finally, we provide causal evidence that the reduction of entry requirements and the repeal of tariff restrictions lead to an increase in entry into regulated occupations and to a reduction of the wages of the incumbents.
    Keywords: regulation, occupation mobility, entry rate, wages
    JEL: J44 K20
    Date: 2019–04
  11. By: Bell Clive
    Abstract: Do urban agglomeration economies enhance the social profitability of rural roads? When all goods are traded at parametric world prices, lower transport costs benefit villagers. Urban activities and welfare are unaffected if labour is immobile, but their levels fall when rural workers move freely to take up urban jobs while remaining members of their extended families.In a closed, two-good economy with mobile labour, the effects of agglomeration economies depend on the substitutability of rural and urban goods. With a Cobb–Douglas rural technology, aggregate benefits are substantially greater in the presence of empirically plausible elasticities of agglomeration economies when preferences are Cobb–Douglas and urban households’ tastes for urban goods are somewhat stronger than those of rural households.When the goods are rather poor substitutes, these enhancing effects are quite small. In an open economy with a single nontradeable whose production is relatively labour-intensive, improved rural roads will likely induce a fall in urban welfare in the presence of agglomeration economies, even with Cobb–Douglas preferences and immobile labour.
    Keywords: Rural roads,Cost of operation (Transportation),Agglomeration,Benefit programmes
    Date: 2018
  12. By: Gregor Langus; Vilen Lipatov; Jorge Padilla
    Abstract: We set up a model to analyze the effects of mergers between sellers of complementary components where firms invest in compatibility and can engage in bundling. We consider the impact of merger on prices, investment and consumer surplus. We also analyse when the merged firm may have an incentive and ability to foreclose rivals.
    Keywords: mergers, complementary goods, welfare effects, foreclosure, compatibility
    JEL: L13 L41
    Date: 2019

This nep-reg issue is ©2019 by Natalia Fabra. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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