|
on Regulation |
| By: | Pio Baake; Sebastian Schwenen; Christian von Hirschhausen |
| Abstract: | In current power markets, the bulk of electricity is sold wholesale and transported to consumers via long-distance transmission lines. Recently, decentralized local power markets have evolved, often as isolated networks based on solar generation. We analyze strategic pricing, investment, and welfare in local power markets. We show that local power markets with peer-to-peer trading are competitive and provide efficient investment incentives, even for a small number of participating households. We identify positive network externalities that make larger markets more attractive but lead to inefficiencies where networks compete. Collectively, our results present a set of positive efficiency results for peer-to-peer electricity markets. |
| Keywords: | Market design, networks, peer-to-peer markets, electricity |
| JEL: | D47 L94 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1904&r=all |
| By: | Pápai, Zoltán; McLean, Aliz; Nagy, Péter; Szabó, Gábor; Csorba, Gergely |
| Abstract: | The rollout of fifth generation mobile networks is progressing around the world, but 5G looks especially expensive compared to previous generations. Network sharing between two or more mobile operators is an obvious way to attain significant cost savings, but may also raise competition concerns. This paper first distinguishes between early and mature 5G, and then discusses the expected changes mature 5G brings to the assessment of active mobile network sharing agreements from a competition policy point of view. We focus on the three main concerns where 5G may bring the most significant changes in the evaluation compared to 4G: service differentiation, cost commonality between the parties and the parties' ability and incentives to grant access to critical inputs to downstream competitors. For each of these concerns, we show that they are not easy to substantiate and in some cases the concerns may even become less grave than under 4G. |
| Keywords: | mobile telecommunications,network sharing,competition policy,competitive assessment,5G |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224870&r=all |
| By: | Christoph Boehringer (University of Oldenburg, Department of Economics); Carolyn Fischer |
| Abstract: | Several EU member states are exploring options for setting minimum domestic carbon prices within the EU Emission Trading System (ETS). First, a “TAX” policy would introduce a carbon tax equal to the difference between the prevailing ETS price and the targeted minimum price. Second, a national auction reserve price would “KILL” allowances by invalidating them until the ETS price equalled the national minimum price. Third, a government could require domestic overcompliance and “BILL” covered entities for extra allowances per ton of emissions, thereby increasing demand for allowances and pulling up the ETS price. We explore the implications of these policy options on national and ETS-wide carbon prices, revenues from emissions allowances, emissions, and economic welfare. We find that a national government’s preferred unilateral policy will depend on the extent to which it values the fiscal benefits of revenues, which favor TAX or to a lesser degree BILL, versus climate benefits, which favor KILL and also BILL, particularly for jurisdictions with more emissions to leverage for overcompliance. Our analysis can be generalized to other multilateral cap-and-trade systems where participants pursue more stringent internal emission pricing through unilateral policies. |
| Keywords: | CO2 price floor, emissions trading, carbon tax |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:432&r=all |
| By: | Ferrandis, Jesús; Feijóo, Claudio; Ramos, Sergio |
| Abstract: | This paper investigates the high-speed broadband situation in the EU and its prospects. Then it uses a deployment model to estimate the investment required in order to meet the European Gigabit Society (EGS) broadband targets set by the European Commission, aiming at ensuring the availability and take-up of very high capacity fixed and wireless networks, in both urban and rural areas, among households and main socio-economic drivers. The model uses data at the NUTS3 level, which is the most granular level that has data available on the status of broadband deployment, to arrive at a coherent and comparable framework. From the different perspectives on the investment to meet EGS targets, the paper concludes on the need to identify new public and private sources of investment and the case to attract them into the broadband business arena, since expected investment from incumbent and alternative operators would not be enough to fill the gap. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224854&r=all |
| By: | Dasgupta, Kalyan; Williams, Mark |
| Abstract: | This paper casts the economic and regulatory debate around digital platforms in a broader and more historical context. We emphasise that despite the considerable theoretical and policy-making discussion that focuses on the specific attributes of platforms-the presence of indirect network effects, economies of scale and difficulties of consumer coordination-that the challenge confronting policy-makers is an inherent tension between the desire to see "competitive" markets characterised by entry or by multiple competing firms, and other economic objectives such as efficiency and incentives to innovate. We note that similar challenges have been confronted in areas such as innovation policy and in network industries where sunk set-up costs and the resulting scale economies potentially limit the scope for efficient entry. Recent work by Weyl and White (2014; 2016) in fact emphasises the similarities between digital platforms and natural monopolies, and argues that even though unregulated platforms will not provide the socially optimal level and quality of service, any distortions created by platforms' profit-maximising behaviour are not efficiently corrected by introducing more competition. They argue that such competition is likely to inefficiently fragment platforms and reduce the level of network effects that they deliver to consumers, and propose that a natural monopoly philosophy of regulation may be more appropriate. In this paper, we focus on the historic experience of the telecommunications industry and its regulators in attempting to balance the desire to introduce competition with the natural constraints posed by the production technologies used in the industry. Telecom regulation has, at various times, had a "marketmitigating" character and at other times has had a "market-shaping" character. The former type of regulation is familiar natural monopoly regulation, which attempts to protect consumers against the consequences of a concentrated market structure, while recognising or accepting that the market structure may be difficult to change and may even have efficiency benefits. The latter type of regulation has involved regulatory efforts to affect market structure through tools such as wholesale access regulation justified by reference to "stepping stone" or "ladder of investment" theories, or vertical unbundling of incumbents. Examining the regulatory history of the US and UK we find that marketshaping intervention has had limited success in creating new entry, and that in both countries, the most important long-term driver of competition appears to be competition from new technologies, e.g., cable and mobile networks in the past and new fibre-based entrants in the present. The experience of telecoms regulation-which we plan to expand to include the experience of additional jurisdictions besides the US and the UK-suggests that the production technology of an industry remains a powerful determinant of market structure. In the case of platform industries, network effects and scale economies may limit the extent of competition in the efficient delivery of platform services. If the experience of telecoms is anything to go by, efforts to engineer more competition in the primary platform market may encounter a high chance of failure or irrelevance in the face of underlying economic forces and technological progress. There may be merit in exploring a regulatory approach that attempts to mitigate market failures that result from concentrated market structures, as proposed by Weyl and White, and competition policy may play an important role in preventing the leveraging of market power from primary platform markets to adjacent services markets. However, policies aimed at increasing direct competition to existing digital platforms may encounter difficulties similar to those encountered by market-shaping policies in telecoms regulation. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224850&r=all |
| By: | Xu, J.; Pollitt, M.; Xie, B-C.; Yang, C-H. |
| Abstract: | China is reforming its electricity supply industry under the guidance of the No.9 document published in 2015. However, such reform has not been supported by new legislation until now. China unveiled an Energy Law draft in April 2020 for public consultation. It is widely regarded as an attempt to provide a legal foundation for ongoing energy sector reforms. This paper introduces the legislative background to China’s Energy Law and then identifies the weaknesses of the April 2020 Energy Law draft from the perspective of international experience. We find that although the Energy Law draft represents positive progress on the vertical unbundling and the price mechanism with respect to the competitive and natural monopoly segments of the power sector, it still does not provide adequate support for most other elements. The enacted Energy Law needs to make more explicit provision on horizontal restructuring, incentive regulation, privatization and independent regulation, while the 1995 Electricity Law should also be updated to include reference to the spot market and efficient allocation of transmission capacity as secondary legislation. |
| Keywords: | No.9 Document, Energy Law, power market reform |
| JEL: | K32 |
| Date: | 2020–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2091&r=all |
| By: | Christopher Kath; Florian Ziel |
| Abstract: | Optimal execution, i.e., the determination of the most cost-effective way to trade volumes in continuous trading sessions, has been a topic of interest in the equity trading world for years. Electricity intraday trading slowly follows this trend but is far from being well-researched. The underlying problem is a very complex one. Energy traders, producers, and electricity wholesale companies receive various position updates from customer businesses, renewable energy production, or plant outages and need to trade these positions in intraday markets. They have a variety of options when it comes to position sizing or timing. Is it better to trade all amounts at once? Should they split orders into smaller pieces? Taking the German continuous hourly intraday market as an example, this paper derives an appropriate model for electricity trading. We present our results from an out-of-sample study and differentiate between simple benchmark models and our more refined optimization approach that takes into account order book depth, time to delivery, and different trading regimes like XBID (Cross-Border Intraday Project) trading. Our paper is highly relevant as it contributes further insight into the academic discussion of algorithmic execution in continuous intraday markets and serves as an orientation for practitioners. Our initial results suggest that optimal execution strategies have a considerable monetary impact. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2009.07892&r=all |
| By: | Queder, Fabian; Lehr, William; Haucap, Justus |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224872&r=all |
| By: | Basaure, Arturo; Benseny, Jaume |
| Abstract: | Successful adoption of urban cellular vehicle-to-everything (C-V2X) services by consumers requires high-density network coverage and a diverse and vibrant community of service providers. This work analyses the economic and technological requirements for a successful smart city platform adoption for such services by modelling the interaction of different sides of the platform and related network effects by means of system dynamics. This work suggests that the adoption of such a platform is a long-term process. Its success depends on the ability of stakeholders (i.e., operators, service providers, the city, etc.) to collaborate in achieving data compatibility, allowing its sharing and efficient usage, which in turn increases the quality of the offered services and accelerates consumer adoption. In addition, this study suggests some pricing and investment strategies which may be helpful for a successful deployment of such a platform. Overall, a smart city platform for C-V2X services involves high uncertainty; however, it may potentially create new sources of large societal benefits. |
| Keywords: | smart city,connectivity and data platform,connected vehicles,adoption,critical mass,network effect,low latency and ultra-reliable requirements,system dynamics |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224845&r=all |
| By: | Bauer, Johannes M.; Prado, Tiago S. |
| Abstract: | This paper relates to current concerns about the high concentration of digital platform markets and the effects of large companies such as Amazon, Facebook, Google, and Microsoft, on innovation. Several stakeholders and analysts assert that digital platforms have become so dominant that they slow the speed of innovation and that regulatory and antitrust intervention is needed to protect the public interest. Despite the strong claims, few systematic studies have examined the positive and negative effects of digital platforms on innovation. This paper seeks to contribute to closing this gap by pursuing three overarching objectives. First, it develops a theoretical framework to deepen our understanding of the multi-faceted relations between digital platforms and innovation. Second, it discusses which empirical evidence could be used to examine the multitude of potential, positive and negative, impacts. Third, the paper discusses the implications of these largely conceptual arguments for the design of policies toward digital platforms. In contrast to traditional regulatory theory and practice, which often uses static economic optimization models, much of innovation economics emphasizes that incentives to introduce new processes, create new products, services, designs, and business models are strongest in out-of-equilibrium processes. However, there are conditions under which market power and the interests of large companies do not align well with the broader goals of vibrant innovation. The paper argues that the most promising instruments to address these issues affect the constitution of digital markets. |
| Keywords: | Digital platforms,innovation economics,innovation ecosystems,market power,regulation,competition policy |
| JEL: | L86 L96 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224846&r=all |
| By: | Johanna Bocklet; Martin Hintermayer |
| Abstract: | This paper uses a discrete-time partial equilibrium model of the European Emissions Trading System (EU ETS) to analyze the impact of the recent reform on allowance prices. By including bounded rationality such as myopia or hedging requirements, we find that the Hotelling price path is no longer visible ex-post even though the Hotelling price rule holds ex-ante in the decision making of the firms. Myopia and hedging requirements have little impact in the pre-reform market but strongly drive market outcomes after the reform. In the post-reform market, hedging requirements in combination with restrictive allowance supply may even cause a physical shortage of allowances. Yet, neither form of bounded rationality can fully explain the market outcomes in the third trading period of the EU ETS. If myopia and hedging requirements are considered simultaneously, the price increase in the EU ETS can be attributed to the reform fundamentals. |
| Keywords: | dynamic optimization, EU ETS, bounded rationality, Hotelling, hedging, myopia |
| JEL: | D91 H32 Q58 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8579&r=all |
| By: | Sandra Cortés Acosta (Motu Economic and Public Policy Research); Arthur Grimes (Motu Economic and Public Policy Research); Catherine Leining (Motu Economic and Public Policy Research) |
| Abstract: | In June 2020, the New Zealand Government passed the Climate Change Response (Emissions Trading Reform) Amendment Act 2020 (ETR Act) to reform the architecture of the New Zealand Emissions Trading Scheme (NZ ETS). As a result of the ETR Act, from 1 January 2023, post-1989 forest land will be classified either as standard post-1989 forest (stock change), standard post-1989 forest (averaging) or permanent post-1989 forest. This paper collates information for obtaining New Zealand Units from these three forestry activities via the NZ ETS and summarises the most recent decisions regarding forestry-related accounting methods and operational changes to the NZ ETS. |
| Keywords: | Forestry, emissions trading scheme, climate change, environment, New Zealand, indigenous forest, exotic forest |
| JEL: | H23 Q54 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:20_11&r=all |
| By: | Noha Elboghdadly (University of Bath, UK and Alexandria University, Egypt); Michael Finus (University of Graz, Austria) |
| Abstract: | Non-cooperative production-based carbon taxes might be set inefficiently low due to the concern of governments about carbon leakage and the loss of competitiveness of their industries. In a strategic trade model, we study the effect of a gradual shift from bilateral production- to unilateral or bilateral consumption-based carbon taxes, considering various forms of border carbon adjustments (BCAs). We analyse the optimal response of two countries in a non-cooperative policy game. We show that if the environmentally more concerned government shifts unilaterally to a consumption-based policy, BCAs on imports create a new incentive for the optimal tax structure. Although profit-shifting and carbon leakage distortions are gradually reduced or even eliminated by combining carbon tariffs with export rebates, the optimal tax may still be below individual marginal damages in strategic setting. In contrast, a bilateral consumption-based tax, could be set equal to or even above individual marginal damages. In equilibrium, all forms of BCAs could allow both governments to set higher carbon taxes than under a bilateral production-based tax regime. However, BCA-regimes which add export rebates to import tariffs should be chosen carefully, as they may actually increase global emissions. |
| Keywords: | Carbon Taxes; Border Carbon Adjustments; Carbon Leakage-shifting Effect; Profit-shifting Effect; Consumer Effect; Tariffs and Export Rebate Income Effect. |
| JEL: | C72 F12 F18 H23 Q58 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2020-16&r=all |
| By: | Behrang Shirizadeh (CIRED / TOTAL S.A.) |
| Abstract: | Many studies have analyzed the energy mix at national and continental scales, suggesting different low-carbon mixes for future energy systems. While there is abundant literature on the energy mix for different sectors, fewer studies deal with achieving the goal of deep decarbonization using sector-coupling. Moreover, they suffer from limited representation of emerging low-carbon options and incomplete coverage of the main energy sectors. We develop an integrated optimization of dispatch and investment model for the whole energy sector, enabling full sector-coupling and applying this model to the French energy system we study the synergies of sector-coupling among different energy vectors, as well as the role of each low-carbon energy supply technology and the impact of the social cost of carbon in reaching an optimal carbon-neutral or negative CO2-emitting energy mix of France in 2050. Our results suggest that a social cost of carbon of €200/tCO2 will achieve carbon-neutrality, and accounting for unfavorable future conditions, €300/tCO2 can assure this target. In the presence of the social cost of carbon renewables become the main source of the primary energy supply (up to more than 80% of the primary energy supply). Exclusion of nuclear energy from the energy supply side has a minor impact on both emission reduction and cost-optimality. A fully electrified heat sector and a highly gas-dependent transport sector fueled with renewable gas help reaching carbon-neutrality at the lowest cost. |
| Keywords: | Energy systems modelling, Social cost of carbon, Sector-coupling, Renewables, Large-scale renewable integration |
| JEL: | Q47 Q48 Q41 C61 H23 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2020.19&r=all |
| By: | Steve Cicala |
| Abstract: | This paper documents an increase in residential electricity consumption while industrial and commercial consumption has fallen during the COVID-19 pandemic in the United States. Hourly smart meter data from Texas reveals how daily routines changed during the pandemic, with usage during weekdays closely resembling those of weekends. The 16% residential increase during work hours offsets the declines from commercial and industrial customers. Using monthly data from electric utilities nationwide, I find a 10% increase in residential consumption, and a 12% and 14% reduction in commercial and industrial usage, respectively, during the second quarter of 2020. This contrasts with the financial crisis of 2008, which also witnessed a rapid decline in industrial electricity consumption, but left residential usage unaffected. The increase in residential consumption is found to be positively associated with the share of the labor force that may work from home. From April through July of 2020, total excess expenditure on residential electricity was nearly $6B. |
| JEL: | L94 Q4 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27937&r=all |
| By: | Santiago Caicedo; Miguel Espinosa; Arthur Seibold |
| Abstract: | We study firm responses to a large-scale change in apprenticeship regulation in Colombia. The reform requires firms to train, setting apprentice quotas that vary discontinuously in firm size. We document strong heterogeneity in responses across sectors, where firms in sectors with high skill requirements tend to avoid training apprentices, while firms in low-skill sectors seek apprentices. Guided by these reduced-form findings, we structurally estimate firms’ training costs. Especially in high-skill sectors, many firms face large training costs, limiting their willingness to train apprentices. Yet, we find substantial overall benefits of expanding apprenticeship training, in particular when the supply of trained workers increases in general equilibrium. Finally, we show that counterfactual policies that take into account heterogeneity across sectors can deliver similar benefits from training while inducing less distortions in the firm-size distribution and in the allocation of resources across sectors. |
| JEL: | E24 J21 J24 M50 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8598&r=all |
| By: | Alves, Vasco |
| Abstract: | This paper describes a duopoly market for healthcare where one of the two providers is publicly owned and charges a price of zero, while the other sets a price so as to maximize its profit. Both providers are subject to congestion in the form of an M/M/1 queue, and they serve patient-consumers who have randomly distributed unit costs of time. Consumer demand (as market share) for both providers is obtained and described. The private provider’s pricing decision is explored, equilibrium existence is proven, and conditions for uniqueness presented. Comparative statics for demand are presented. Social welfare functions are described and the welfare maximizing condition obtained. More detailed results are then obtained for cases when costs follow uniform and Kumaraswamy distributions. Numerical simulations are then performed for these distributions, employing several parameter values, demonstrating the private provider’s pricing decision and its relationship with social welfare. |
| Keywords: | Waiting times; queueing; private health care; competition |
| JEL: | D43 I11 L13 |
| Date: | 2019–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100996&r=all |
| By: | Pejman Bahramian (Department of Economics, Queen's University); Glenn Jenkins; Frank Milne (Queen's University) |
| Abstract: | This study uses an ex-post evaluation of the grid-connected wind projects in Ontario, Canada, to quantify the stakeholder impacts of such renewable energy projects. Our study includes a financial, economic and stakeholder analysis of these wind farms. The analysis sheds light on the distributional impacts that arise when there is a significant gap between the incentives created by the financial price paid for electricity generation and the economic value of the electricity generated. The analysis shows that the negotiated power purchase agreements (PPAs) have resulted in a negative outcome for the economy in all circumstances. It is found that the present value of the economic costs is at least three times the present value of the economic benefits, including the global benefits from the reduced CO2 emissions. This loss is borne by all the stakeholders of the electricity system, except the private owners of the wind farms. The losers are primarily the electricity consumers followed by the governments. The Ontario Electricity Rebate (OER) programme, which is financed by increased government borrowing, has the effect of transferring a large share of the costs incurred to promote investments in wind power to future generations of taxpayers in Ontario. |
| Keywords: | economic analysis, electricity, Ontario, wind power |
| JEL: | O55 D61 Q42 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1442&r=all |
| By: | Benjamin Ouvrard (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Raphaële Préget (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Arnaud Reynaud (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Laetitia Tuffery (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | In a global context of increasing water scarcity, reducing water use in the agricultural sector is one of the spearheads of sustainable agricultural and environmental policies. New technologies such as smart water meters are promising tools for addressing this issue, but their voluntary adoption by farmers has been limited. Conducting a discrete choice experiment with randomized treatments, we test two policy instruments designed to foster the voluntary adoption of smart water meters: a conditional subsidy and green nudges. The conditional subsidy is offered to farmers who adopt a smart meter only if the rate of adoption in their geographic area is sufficiently high (25%, 50% or 75%). In addition, we implement informational nudges by providing farmers specific messages regarding water scarcity and water management. With the responses of 1,272 French farmers, we show that both policy instruments are effective tools for fostering smart water meter adoption. Surprisingly, our results show that the willingness to pay for the conditional subsidy does not depend on the collective adoption threshold. We also demonstrate that farmers who receive an informational nudge are more likely to opt for a smart water meter. This result calls for a careful joint design of these two policy instruments.. |
| Keywords: | Behavioural economics,Choice experiment,Nudges,French farmers,Smart water meters,Social norms. |
| Date: | 2020–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-02958784&r=all |
| By: | Lee, Hyeongjik; Jeong, Seonkoo; Lee, Kwanghee |
| Abstract: | While the importance of both broadband itself and its speed increases in a whole society, the high cost of providing broadband as universal service at high speed still raises a question of whether to introduce the USO. Therefore, the introduction of broadband universal service at 100Mbps since 2020 in Korea could be a meaningful case to study the necessity of broadband USO. This study attempts to propose an estimation model of the costs of providing broadband universal service in Korea and to introduce how the results by utilizing method can contribute to understanding the Korean case. In particular, since the proposed model was developed based on the bottom up (BU) approach, which establish es an efficient network using the latest technologies, this paper suggested the accurate and reliable cost of providing broadband universal service with nationwide coverage in Korea by the estimation model. The main findings are twofold. First, the total cost of providing broadband USO at 100Mbps through FTTH technology was at 1.34 trillion. Since it was relatively small compared with the results in similar previous studies, the introduction of broadband universal service was reasonably acceptable in Korea. Second, there was no significant difference in the average cost per building for broadband USO between 50Mbps and 100Mbps; thus the Korean government's decision, which sets the broadband speed for broadband USO at 100Mbps, was sufficiently reasonable at least from a cost perspective. Those results imply that at least developed cou ntries with relatively high broadband penetration could consider providing broadband universal services at least 50Mbps by fiber based technologies. They also suggest that the technology neutral approach could contribute to the cost effective deployment of broadband for USO. |
| Keywords: | cost estimation,universal service,broadband,Korea |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224865&r=all |
| By: | Abate, Serafino; Bahia, Kalvin; Castells, Pau |
| Abstract: | This study evaluates the impact of competition on quality, innovation and price in Europe's mobile communications market during the 4G era (2011-18). Our results indicate that European mobile users in more concentrated markets benefitted the most from higher network quality, particularly with regard to download speeds. We find that dispersion of fixed costs and assets among a greater number of players can result in diseconomies of scale and a less efficient use of resources, which translates into lower network performance, to the detriment of consumers. We also find evidence of investment per operator being greater in markets with higher profit margins, which are also typically more concentrated markets. |
| JEL: | K20 L10 L40 L96 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itso20:224841&r=all |
| By: | Woodcock, Ramsi |
| Abstract: | If the state is a force monopolist, as Max Weber famously claimed, then the law is a kind of antitrust policy, with criminal law securing the state’s monopoly on force and constitutional law regulating the exercise of the force monopolist’s power primarily through the right to vote, which makes of the state the equivalent of a consumer cooperative dedicated to the production of security. One consequence of the cooperative approach is that the state’s approach to vertical integration—in this context state ownership of enterprise—has mirrored antitrust’s own approach to the vertical integration of private firms: to authorize integration only where it is likely to benefit consumers, which is rarely when the monopolist sells security, but often in the case of most products sold by private enterprise. Another consequence, low tax rates, differs greatly from antitrust’s own approach to private enterprise, which broadly exempts the charging of high prices from liability. This difference in approach offers a useful lesson for antitrust policy, particularly in the area of digital platforms: that the heart of monopoly power is price, and the best way to dull the power of the platform monopolist is to regulate the prices it can charge and leave the question whether to permit it to integrate vertically to be decided on efficiency grounds. This suggests that the rule proposed by Senator Elizabeth Warren, that no big firm should be allowed to compete on its own platform, which amounts to a prohibition on vertical integration, is likely to be unhelpful. A better approach would be to regulate the fees platforms charge competitors and consumers and allow the tech giants to integrate when doing so would benefit consumers. |
| Date: | 2020–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:73fnh&r=all |
| By: | Keiser, David A.; Shapiro, Joseph S. |
| Abstract: | In the half century since the founding of the U.S. Environmental Protection Agency, the U.S. has spent nearly $5 trillion ($2017) to provide cleaner rivers, lakes, and drinking water, or annual spending of 0.8 percent of U.S. GDP in most years. Yet over half of rivers and substantial shares of drinking water systems violate standards, and polls for decades have listed water pollution as Americans’ number one environmental concern. We assess the history, effectiveness, and efficiency of the Clean Water Act and Safe Drinking Water Act, and obtain four main conclusions. First, water pollution has fallen since these laws, in part due to their interventions. Second, investments made under these laws could be more costeffective. Third, most recent studies estimate benefits of cleaning up pollution in rivers and lakes which are much less than their costs. Either these analyses systematically understate the value of these investments or these investments are inefficient. Analysis finds more positive net benefits of drinking water quality investments. Fourth, economic research and teaching on water pollution is surprisingly uncommon, as measured by samples of publications, conference presentations, or textbooks. |
| Date: | 2018–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201812010800001061&r=all |
| By: | Jorge Padilla (Compass Lexecon); Salvatore Piccolo (Università di Bergamo, Compass Lexecon and CSEF); Helder Vasconcelos (Porto University and Compass Lexecon) |
| Abstract: | We characterize and compare the private and social incentives to collect consumer data by a vertically-integrated online intermediary who competes with third-party sellers listed on its platform and is required by regulation to share with rivals all the information it gathers. With linear intermediation fees and price competition, the intermediary over-invests in accuracy compared to the social optimum when the intra-platform competition is sufficiently weak and when demand is not too responsive to quality. By contrast, the intermediary tends to under-invest in accuracy when the intra-platform competition is strong enough, and demand is sufficiently responsive to quality. With quantity competition, the intermediary always over-invests in accuracy. Importantly, when consumers exhibit privacy concerns, the over-investment problem worsens, whereas the under-investment problem mitigates. We also investigate the impact of alternative (non-linear) contractual arrangements. |
| Keywords: | Consumer Data, Competition, Information Accuracy, Platforms, Privacy, Value of Information, Vertical Integration. |
| JEL: | D47 D85 L5 L81 M3 |
| Date: | 2020–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:583&r=all |