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on Regulation |
| By: | Street, John; Smith, David |
| Keywords: | Public Economics |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ctrf31:314706&r= |
| By: | Irwin, Neal; Sims, Lee; Jones, Joseph |
| Keywords: | Demand and Price Analysis |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cantrf:314707&r= |
| By: | Jourquin, Bart; Demilie, Laurent; Beuthe, Michel |
| Keywords: | Industrial Organization |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cantrf:314680&r= |
| By: | Saruta, Fuyuki |
| Abstract: | We investigate a two-sided market model in which two platforms compete for sellers and buyers who can participate in multiple platforms (multihoming), and one of the two platforms can make exclusive contracts with sellers. The platform faces a trade-off when it enters into exclusivity agreements with sellers, which gives it an advantage when competing for buyers but reduces its revenue from the seller side. In addition, we expect that the existence of multihoming buyers weakens the platform's incentive to have an exclusive contract with sellers. Even when buyers can multihome, does a platform have an incentive to make exclusive contracts with sellers? If so, how does exclusive dealing affect social welfare? We obtain the following results. First, in equilibrium, the platform makes exclusive contracts with all sellers or not at all. If sellers' network externality on buyers is sufficiently large (small), it chooses fully exclusive dealing (nonexclusive dealing). Second, exclusive dealing is preferable (detrimental) to social welfare when the network externality is sufficiently large (small). Exclusive dealing encourages the multihoming of buyers, which allows agents to have more interactions on one platform and prompts more buyers to obtain stand-alone benefits from multiple platforms. |
| Keywords: | Exclusive contracts; Two-sided markets; Multihoming; Platform competition. |
| JEL: | D43 D62 L13 L14 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110070&r= |
| By: | Okuyama, Suzuka |
| Abstract: | We investigate mixed markets in which a social welfare-maximizing public firm and a private firm engage in behavior-based price discrimination. We consider two cases: one where the private firm is completely owned by domestic shareholders and one where it is completely owned by foreign shareholders. In the domestic mixed duopoly, BBPD is irrelevant from the viewpoint of social welfare. This is because poaching does not occur. In the international mixed duopoly, BBPD reduces the public firm’s market share but improves domestic social welfare. This is because the outflow to foreign shareholders decreases. We also consider domestic and international pure duopoly and find that the presence of public firms reduces welfare loss caused by BBPD. |
| Keywords: | Behavior-based price discrimination, Mixed oligopoly, Foreign firms, Privatization |
| JEL: | D43 H42 L13 |
| Date: | 2021–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110206&r= |
| By: | Zambrano, Juan Carlos; Astaiza-Gómez, José Gabriel; García, Juan David |
| Abstract: | In this article we analyze the remuneration mechanism for the reduction of energy losses, through a dynamic principal-agent model in continuous time. The agent represents the power distribution company, which makes investments, or in other words, makes an effort to reduce energy losses. The principal represents the regulator, who offers a contract (regulation) to the agent, designed with the purpose of inducing the agent to exert the optimal effort, in the sense that such effort maximizes the expectation of power distribution minus the cost of compensating the agent. In our model, the energy distribution follows a process of diffusion with drift (drift), determined by the effort of the agent, not observable or verifiable by the principal. The optimal contract, carried out on the basis of the continuation value of the agent as a state variable, is calculated from a differential equation. |
| Keywords: | Natural Monopoly, Electric Power Losses, Remuneration, Asymmetric Information, Moral Hazard. |
| JEL: | C61 C62 D21 D42 D61 D81 D82 D86 G32 G35 G38 H25 H32 L51 Q41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110143&r= |
| By: | Anaya, K. L.; Pollitt, M. G. |
| Abstract: | This paper quantifies the benefits of introducing reactive power markets that promote the participation of distributed energy resources (DER) in a coordinated way, between the electricity system operator and the electricity distribution utilities. The contribution that DER could make by displacing conventional network assets in supplying reactive power support is evaluated in the context of a case study, the Power Potential (PP) project in Great Britain. We discuss the rising need for absorptive (leading) reactive power in the PP trial area, driven by the rapid connection of renewable generation in an area of low demand growth. A social cost benefit analysis (SCBA) is performed to quantify the net benefits, with sensitivities regarding bid prices, % of DER participation, time horizons. Price information from the PP live trial conducted between January and March 2021 is also used to evaluate the robustness of the SCBA and to estimate benefits using actual prices. Our results suggest that energy consumers could save from 8-21% of business as usual asset costs by 2050. The introduction of trial bid prices increases these savings by around 3% of business as usual asset costs out to 2050. Potential sources of additional benefits on top of those identified in the SCBA are also discussed. |
| Keywords: | reactive power, social cost benefit analysis, distributed energy resources, ancillary services procurement |
| JEL: | D44 D47 L94 Q40 |
| Date: | 2021–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2168&r= |
| By: | Thomas M\"obius; Iegor Riepin; Felix M\"usgens; Adriaan H. van der Weijde |
| Abstract: | Flexibility options, such as demand response, energy storage and interconnection, have the potential to reduce variation in electricity prices between different future scenarios, therefore reducing investment risk. Moreover, investment in flexibility options can lower the need for generation capacity. However, there are complex interactions between different flexibility options. In this paper, we investigate the interactions between flexibility and investment risk in electricity markets. We employ a large-scale stochastic transmission and generation expansion model of the European electricity system. Using this model, we first investigate the effect of risk aversion on the investment decisions. We find that the interplay of parameters leads to (i) more investment in a less emission-intensive energy system if planners are risk averse (hedging against CO2 price uncertainty) and (ii) constant total installed capacity, regardless of the level of risk aversion (planners do not hedge against demand and RES deployment uncertainties). Second, we investigate the individual effects of three flexibility elements on optimal investment levels under different levels of risk aversion: demand response, investment in additional interconnection capacity and investment in additional energy storage. We find that that flexible technologies have a higher value for risk-averse decision-makers, although the effects are nonlinear. Finally, we investigate the interactions between the flexibility elements. We find that risk-averse decision-makers show a strong preference for transmission grid expansion once flexibility is available at low cost levels. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.04088&r= |
| By: | Didier Laussel; Ngo Van Long |
| Abstract: | A monopolist producing vertically differentiated durable goods can offer in each period a sequence of price-quality menus to segment the market. We show that, contrary to the Coase conjecture for the homogeneous durable good monopoly, thanks to the ability to produce differentiated durable goods, in all Markov-Perfect Equilibria, the profit of a monopolist that cannot commit to future price-quality menus is bounded below by a strictly positive value independent of the discount factor. |
| Keywords: | product quality, durable good monopoly, second-degree price discrimination, Coase conjecture |
| JEL: | C73 D42 L12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9331&r= |
| By: | David Bounie; Antoine Dubus; Patrick Waelbroeck |
| Abstract: | We analyze competition between data intermediaries collecting information on consumers, which they sell to firms for price discrimination purposes. We show that competition between data intermediaries benefits consumers by increasing competition between firms, and by reducing the amount of consumer data collected. We argue that merger policy guidelines should investigate the effect of the data strategies of large intermediaries on competition and consumer surplus in related markets. |
| Keywords: | data, mergers, competition, consumer surplus |
| JEL: | L13 L40 L86 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9339&r= |
| By: | Laszlo Goerke (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Marco de Pinto (University of Applied Labour Studies) |
| Abstract: | How does cost uncertainty affect the welfare consequences of an oligopoly? To answer this question, we investigate a Cournot oligopoly in which firms produce a homogeneous commodity and market entry is feasible. Marginal costs are unknown ex-ante, i.e. prior to entering the market. They become public knowledge before output choices are made. We show that uncertainty induces additional entry in market equilibrium and also raises the socially optimal number of firms. Since the first change dominates, the excessive entry distortion is aggravated. This prediction is robust to various extensions of the analytical set-up. Furthermore, the welfare loss due to oligopoly tends to increase with uncertainty. |
| Keywords: | Oligopoly, Excessive Entry, Uncertainty, Welfare |
| JEL: | D43 L13 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:202105&r= |
| By: | ITF |
| Abstract: | This report examines the potential of data-driven approaches to improving transport infrastructure maintenance. It assesses trends in maintenance strategies, explores how the targeted use of data could make them more effective for different types of transport infrastructure, and looks into implications for policy. |
| Date: | 2021–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaac:95-en&r= |
| By: | Hintermann, Beat (University of Basel); Schoeman, Beaumont (University of Basel); Molloy, Joseph; Götschli, Thomas; Castro, Alberto; Tchervenkov, Christopher; Tomic, Uros; Axhausen, Kay W. |
| Abstract: | Pigovian transport pricing was implemented in a large-scale field experiment in urban areas of Switzerland. The pricing varied across time, space and mode of transport. One third of the participants were given a financial incentive to reduce their external costs of transport, whereas others were provided information only or served as a control group. The pricing treatment caused a significant reduction in the external costs of transport. This reduction is a consequence of mode substitution and a shift of departure times. The effect of providing information in the absence of pricing was statistically significant only for subgroups of the sample. |
| Keywords: | Transport pricing; pigovian taxation; mobility; external costs; congestion; tracking. |
| JEL: | H23 H31 I18 Q52 Q54 R41 R48 |
| Date: | 2021–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2021/11&r= |
| By: | Okuyama, Suzuka |
| Abstract: | This paper investigates price and quality competition in a mixed duopoly market, where a state-owned welfare-maximizing public firm competes against a profit-maximizing private firm. We use a differential game approach with a Hotelling spatial competition framework. We extend Cellini et al.(2018) by incorporating a state-owned public firm and derive open- and closed-loop solutions. The steady-state quality levels are optimal in the open-loop solution. Numerical results show that the steady-state quality level of the public firm in the closed-loop solution does not necessarily lower than that in the open-loop solution. As a private firm's investment is large, the public firm’s incentive for quality improvement increases since there exists intertemporal strategic substitutability between investment and quality. Competition and privatization policies are neutral under the open-loop solution but not under the closed-loop solution. Competition policy improves social welfare with an increase in quality and privatization policy improves it with an decrease in quality in the closed-loop solution. |
| Keywords: | Mixed oligopoly, Privatization, Differential-game, Quality. |
| JEL: | H42 L13 |
| Date: | 2021–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110148&r= |
| By: | Michael Kunin; Kresimir Zigic |
| Abstract: | We study how private intellectual property rights protection affects equilibrium prices and profits in a duopoly competition between firms that offer a product variety of distinct qualities (vertical product differentiation) in a setup that is closely related to that put forward by Jain (2008), where firms offer the same qualities in equilibrium (horizontal product differentiation). Consumers may make a choice to buy a legal version, use an illegal copy (if they want to and can), or not use a product at all. Using an illegal version violates intellectual property rights protection and is thus punishable when disclosed. Thus, both private and public (copyright) intellectual property rights protection are available on scene. |
| Keywords: | vertical and horizontal product differentiation; software piracy; Bertrand competition; private and public intellectual property rights protection; |
| JEL: | D43 L11 L21 O25 O34 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp701&r= |
| By: | Castańeda, Alexandra; Matheus, Andreas; Klimczuk, Andrzej; Berti Suman, Anna; Duerinckx, Annelies; Pavlakis, Christoforos; Baibarac-Duignan, Corelia; Broglio, Elisabetta; Caruso, Federico; Thuermer, Gefion; Feord, Helen; Asine, Janice; Piera, Jaume; Soacha, Karen; Zourou, Katerina; Wagenknecht, Katherin; Vohland, Katrin; Freyburg, Linda; Leppée, Marcel; Camara Oliveira, Marta; Sterken, Mieke; Woods, Tim |
| Abstract: | ICTs, personal data, digital rights, the GDPR, data privacy, online security… these terms, and the concepts behind them, are increasingly common in our lives. Some of us may be familiar with them, but others are less aware of the growing role of ICTs and data in our lives - and the potential risks this creates. These risks are even more pronounced for vulnerable groups in society. People can be vulnerable in different, often overlapping, ways, which place them at a disadvantage to the majority of citizens; Table 3 in this guide presents some of the many forms and causes of vulnerability. As a result, vulnerable people need greater support to navigate the digital world, and to ensure that they are able to exercise their rights. This guide explains where such support can be found, and also answers the following questions: - What are the main ethical and legal issues around ICTs for vulnerable citizens? - Who is vulnerable in Europe? - How do issues around ICTs affect vulnerable people in particular? This guide is a resource for members of vulnerable groups, people who work with vulnerable groups, and citizens more broadly. It is also useful for data controllers1 who collect data about vulnerable citizens. While focused on citizens in Europe, it may be of interest to people in other parts of the world. It forms part of the Citizens’ Information Pack produced by the PANELFIT project, and is available in English, French, German, Italian and Spanish. You are welcome to translate this guide into other languages. Please send us a link to online versions in other languages, so that we can add them to the project website. |
| Keywords: | General Data Protection Regulation (GDPR),ICTs,citizen science,data management,legal and ethical issues,vulnerability |
| JEL: | C89 Z19 D89 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esrepo:243095&r= |
| By: | Steven Ongena (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); Florentina Paraschiv (Zeppelin University, Chair of Finance; Norwegian University of Science and Technology, Faculty of Economics and Management, NTNU Business School; University of St. Gallen, Institute for Operations Research and Computational Finance); Endre J Reite (NTNU Department of International Business) |
| Abstract: | In this paper, we analyse the price discrimination and household switching in the residential mortgage market. Accessing a unique proprietary micro-data set from Norway, we examine the difference between the loan rate paid by current clients when receiving a competing offer from another bank and the best rate simultaneously being offered to new customers by the current bank. The results show that current clients pay around 20 basis points more than new customers are offered; however, this rate differential is kept in check by client switching. New regulations and digitalization that enhance transparency could reduce the rate differential, but the introduction of new banking products as well as the change in timing of the rate differentiation - from immediate upfront to gradually over time - may be used to preserve it. |
| Keywords: | Mortgage lending, Financial regulation, Consumer protection, digitalization, Price discrimination |
| JEL: | D12 D14 G21 C41 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2167&r= |
| By: | Castellini, Marta; Di Corato, Luca; Moretto, Michele; Vergalli, Sergio |
| Abstract: | In this paper, we provide a real options model framing prosumers’ investment in photovoltaic plants. This is presented in a Smart Grid context where the exchange of energy among prosumers is possible. We determine the optimal size of the photovoltaic installations based on the influence the self-consumption profiles on the exchange of energy among prosumers. We calibrate the model using figures relative to the Northern Italy energy market and investigate the investment decision allowing for different prosumer profiles and consider several combinations of their individual energy demand and supply. Our findings show that the shape of individual energy demand and supply curves is crucial to the exchange of energy among prosumers, and that there could be circumstances under which no exchange occurs. |
| Keywords: | Resource /Energy Economics and Policy |
| Date: | 2021–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:314755&r= |
| By: | Jozef Konings; In Kyung Kim; Jinhyuk Lee |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:asx:nugsbd:2021-01&r= |
| By: | Zhao, Yue; Brooks, Adria Elise; Du, Xiaodong |
| Keywords: | Resource/Energy Economics and Policy, Environmental Economics and Policy, Research Methods/Statistical Methods |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea21:313883&r= |
| By: | Noussan, Michel; Hafner, Manfred; Campbell, Loyle; Lu, Xinqing; Raimondi, Pier Paolo; Zhu, Erpu |
| Abstract: | This work compares the different decarbonization strategies of the power sector in China, the European Union and the United States, by considering the historical evolution of electricity generation and the current situation. Such a comparison is gaining a broader significance when evaluated with an additional level of geographic detail, by comparing European countries, Chinese provinces, and US states. The differences among these geographies highlight the challenges and opportunities of pushing towards low-carbon technologies, by making clear that regional decarbonization will need to address very different local contexts. Moreover, multiple policy and planning levels are involved, and those mechanisms are different in the three blocs being compared. Our analysis shows that these three blocs, although moving towards similar decarbonization targets, are currently at different levels of carbon intensity. The zero-carbon pathway will need to be declined in different local goals, based on the availability of low-carbon resources and the electricity demand. Given the geographical differences between demand and supply, and the likely increase of electricity demand, an improvement of power transmission networks will be essential. This work is part of a series of papers on the geopolitics of the energy transition in China, the European Union and the United States of America. |
| Keywords: | Resource /Energy Economics and Policy |
| Date: | 2021–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:314197&r= |