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on Regulation |
| By: | Budzinski, Oliver; Mendelsohn, Juliane |
| Keywords: | big tech,digital economy,digital ecosystems,GAFAM,competition policy,antitrust,Digital Markets Act (DMA),sector-specific regulation,law and economics |
| JEL: | K21 K23 K24 L40 L50 L81 L86 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:154&r= |
| By: | Ali Hortacsu (University of Chicago and NBER); Olivia R. Natan (University of California, Berkeley); Hayden Parsley (University of Texas, Austin); Timothy Schwieg (University of Chicago, Booth); Kevin R. Williams (Cowles Foundation, Yale University) |
| Abstract: | We study how organizational boundaries affect pricing decisions using comprehensive data from a large U.S. airline. We document that the ï¬ rm’s advanced pricing algorithm, utilizing inputs from different organizational teams, is subject to multiple biases. To quantify the impacts of these biases, we estimate a structural demand model using sales and search data. We recover the demand curves the ï¬ rm believes it faces using forecasting data. In counterfactuals, we show that correcting biases introduced by organizational teams individually have little impact on market outcomes, but coordinating organizational outcomes leads to higher prices/revenues and increased deadweight loss in the markets studied. |
| Keywords: | Pricing Frictions, Organizational Inertia, Dynamic Pricing, Revenue Management, Behavioral IO |
| JEL: | C11 C53 D22 D42 L10 L93 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2312&r= |
| By: | Rossi, Martin |
| Abstract: | This article analyzes the relative performance of recently privatized Latin American electricity distribution utilities. Empirical results show that privatized firms are more efficient in their use of labor and have higher labor productivity growth rates than public or cooperative companies. There is also evidence of increasing returns to scale. |
| Keywords: | Ownership, Efficiency, Technical Change, Input Requirement Function |
| JEL: | L94 O30 |
| Date: | 2021–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110534&r= |
| By: | Yulong Chen; Liyuan Ma; Peter F. Orazem (Center for Agricultural and Rural Development (CARD) at Iowa State University) |
| Abstract: | The federal government has invested $60 billion thus far in rural broadband deployment, and, recently, FCC chairman Ajit Pai launched the Rural Digital Opportunity Fund, which will add up to $20.4 billion to further expand broadband in underserved rural areas. However, broadband expansion may not reverse the decades-long population shift from rural to urban markets and it does not affect all economic sectors equally. Chen, Ma, and Orazem look at the overall effect of broadband on net rural firm entry and find that the construction, manufacturing, wholesale trade, real estate, and arts and entertainment industries see the most positive benefits, but the broadband effect is too small to reverse the 70-year long rural to urban shift in population and economic activity. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:apr-spring-2020-4&r= |
| By: | Bertin Martens; Geoffrey Parker; Georgios Petropoulos; Marshall Van Alstyne |
| Abstract: | Our paper has benefitted from inspiring discussions with Erik Brynjolfsson, Luis Cabral, Rebecca Christie, Maria Demertzis, Erika Douglas, Nestor Duch-Brown, Justus Haucap, Jan Krämer , Maciej Sobolewski, Sebastian Steffen, Tommaso Valletti, Reinhilde Veugelers, Guntram Wolff as well as participants at Ascola 2021, Yale University’s Big Tech and Antitrust Conference 2020, OECD Competition Committee Hearing Dec. 2020, Bruegel, Digital Markets Competition Forum at Copenhagen Business School 16 June 2021, and the... |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:45784&r= |
| By: | Stöhr, Annika |
| Abstract: | In this comprehensive review of ex-post merger studies price effects of horizontal transactions are evaluated. By combining and further analyzing the results of 52 retrospective studies on 82 mergers or merger-like transactions it can be shown that the industry alone is no strong indication for the direction of price-related merger effects. However, the "size" or "importance" of a transaction as well as market concentration pre-merger and change in concentration due to the transaction seem to have an impact on post-transaction price development. |
| Keywords: | Antitrust,Merger Control,Industrial Economics,Retrospective Studies,Ex-Post Studies,Competition Law Enforcement |
| JEL: | D49 K21 L13 L40 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:151&r= |
| By: | Kang, Gusang (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Jang, Yungshin (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Oh, Taehyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Rim, Jeewoon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | In the era of inter-industry convergence, abuses of substantial market power by large digital platforms such as Google, Apple, Facebook, and Amazon, and their increasing number of acquisitions towards small- and medium-sized tech-firms suspicious of eliminating potential competitors are recent representative issues in the ICT sector. Alternative competition policies have been discussed to effectively deal with those firms' anti-competitive behaviors in a changing environment of competition such as a digital platform economy instead of traditional policies. In this regard, we examine the U.S. and EU competition policy responses to ICT firms' anti-competitive behaviors in order to provide policy implications to our competition authority. According to our case studies, the U.S. and EU competition and legal authorities consider characteristics of the digital platform economy when they conclude whether firm behaviors are anti-competitive. Furthermore, we find that Facebook's acquisition of WhatsApp leads to a tipping effect and harms market competition. Given these results, we suggest that our competition authority has to consider the balance between innovation and competition when they implement competition policies in the era of inter-industry convergence. |
| Keywords: | U.S.; EU; convergence; competition; ICT |
| Date: | 2021–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2021_021&r= |
| By: | Brendan Kline; Ariel Pakes; Elie Tamer |
| Abstract: | We review approaches to identification and inference on models in Industrial Organization with partial identification and/or moment inequalities. Often, such approaches are intentionally built directly on assumptions of optimizing behavior that are credible in Industrial Organization settings, while avoiding the use of strong modeling and measurement assumptions that may not be warranted. The result is an identified set for the object of interest, reflecting what the econometrician can learn from the data and assumptions. The chapter formally defines identification, reviews the assumptions underlying the identification argument, and provides examples of their use in Industrial Organization settings. We then discuss the corresponding statistical inference problem paying particular attention to practical implementation issues. |
| JEL: | C18 L22 L25 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29409&r= |
| By: | Snower, Dennis J. (Hertie School of Governance); Twomey, Paul (Global Solutions Initiative) |
| Abstract: | We identify an important feature of current digital governance systems: "third-party funded digital barter": consumers of digital services get many digital services for free (or underpriced) and in return have personal information about themselves collected for free. In addition, the digital consumers receive advertising and other forms of influence from the third parties that fund the digital services. The interests of the third-party funders are not well-aligned with the interests of the digital consumers. This fundamental flaw of current digital governance systems is responsible for an array of serious problems, including inequities, inefficiencies, manipulation of digital consumers, as well as dangers to social cohesion and democracy. We present four policy guidelines that aim to correct this flaw by shifting control of personal data from the data aggregators and their third-party funders to the digital consumers. The proposals cover "official data" that require official authentication, "privy data" that is either generated by the data subjects about themselves or by a second parties, and "collective data." The proposals put each of these data types under the individual or collective control of the data subjects. There are also proposals to mitigate asymmetries of information and market power. |
| Keywords: | digital governance, digital services, personal data, digital service providers, market power, advertising, preference manipulation |
| JEL: | O33 P34 O35 O36 O38 H41 L41 L44 L51 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp169&r= |
| By: | Demary, Vera; Matthes, Jürgen |
| Abstract: | China is making great strides in regulating digitization. Some aspects are similar to European approaches, but Chinese laws on data security and protection go much further. This may result in a threat to European business models. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkkur:732021&r= |
| By: | Sakaguchi, Makishi; Fujii, Hidemichi |
| Abstract: | The merit order effect (MOE), which renewable energy sources can decrease wholesale electricity prices, plays an important role in establishing low-carbon societies. After the liberalization of the electricity market, the trade volume of the Japan Electric Power Exchange (JEPX) day-ahead spot market drastically increased between 2016 and 2019; however, price spikes still occur often. Ordinary least squares and quantile regression analyses were applied in this study to investigate how wind and solar photovoltaics (PV) energy generation affect the JEPX day-ahead spot price by time, price range, and area, and we concluded that the MOE of wind increased between 2016 and 2019 while that of PV decreased during this time. In regard to the high price ranges, although wind generation is not significant in terms of reducing price spikes, PV had this effect in 2016 and 2017 but not during the other years covered. The study area was divided into four regions, and each area followed trends that were different from those of the national analysis. Overall, the key finding of our study is that wind power has more potential to reduce electricity prices than PV. |
| Keywords: | merit order effect; wholesale electricity market; renewable energy |
| JEL: | Q42 Q43 Q54 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110554&r= |
| By: | Glenk, Gunther (University of Mannheim); Meier, Rebecca (University of Mannheim); Reichelstein, Stefan (University of Mannheim and Stanford University) |
| Abstract: | The rapid transition to a decarbonized energy economy is widely believed to hinge on the rate of cost improvements for certain clean energy technologies, in particular renewable power and energy storage. This paper adopts the classical learning-by-doing framework of Wright (1936), which predicts cost (price) to fall as a function of the cumulative volume of past deployments. We examine the learning rates for key clean energy system components (e.g., solar photovoltaic modules) and the life-cycle cost of generating clean energy (e.g., wind energy and hydrogen obtained through electrolysis). Our calculations point to significant and sustained learning rates, which, in some contexts, are much faster than the traditional 20% learning rate observed in other industries. Finally, we argue that the observed learning rates for individual technologies reinforce each other in advancing the transition to a decarbonized energy economy. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3958&r= |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| Abstract: | The purpose of this study is to assess the nexus between governance and renewable energy consumption in sub-Saharan Africa. The focus is on 44 countries in Sub-Saharan Africa with data from 1996 to 2016. The empirical evidence is based on Tobit regressions. It is apparent from the findings that political and institutional governance are negatively related to the consumption of renewable energy in the sampled countries. The unexpected findings are clarified and policy implications are discussed in the light of sustainable development goals. This study extends the extant literature by assessing how political governance (consisting of political stability and “voice & accountability”) and institutional governance (entailing the rule of law and corruption-control) affect the consumption of renewable energy in sub-Saharan Africa. |
| Keywords: | Renewable energy; Governance; Sub-Saharan Africa; Sustainable development |
| JEL: | H10 O11 O55 Q20 Q30 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110600&r= |
| By: | Werner, Tobias |
| Abstract: | As self-learning pricing algorithms become popular, there are growing concerns among academics and regulators that algorithms could learn to collude tacitly on non-competitive prices and thereby harm competition. I study popular reinforcement learning algorithms and show that they develop collusive behavior in a simulated market environment. To derive a counterfactual that resembles traditional tacit collusion, I conduct market experiments with human participants in the same environment. Across different treatments, I vary the market size and the number of firms that use a self-learned pricing algorithm. I provide evidence that oligopoly markets can become more collusive if algorithms make pricing decisions instead of humans. In two-firm markets, market prices are weakly increasing in the number of algorithms in the market. In three-firm markets, algorithms weaken competition if most firms use an algorithm and human sellers are inexperienced. |
| Keywords: | Artificial Intelligence,Collusion,Experiment,Human-Machine Interaction |
| JEL: | C90 D83 L13 L41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:372&r= |
| By: | Ali Hortacsu (University of Chicago and NBER); Olivia R. Natan (University of California, Berkeley); Hayden Parsley (University of Texas, Austin); Timothy Schwieg (University of Chicago, Booth); Kevin R. Williams (Cowles Foundation, Yale University) |
| Abstract: | We propose an approach to modeling and estimating discrete choice demand that allows for a large number of zero sale observations, rich unobserved heterogeneity, and endogenous prices. We do so by modeling small market sizes through Poisson arrivals. Each of these arriving consumers then solves a standard discrete choice problem. We present a Bayesian IV estimation approach that addresses sampling error in product shares and scales well to rich data environments. The data requirements are traditional market-level data and measures of consumer search intensity. After presenting simulation studies, we consider an empirical application of air travel demand where product-level sales are sparse. We ï¬ nd considerable variation in demand over time. Periods of peak demand feature both larger market sizes and consumers with higher willingness to pay. This ampliï¬ es cyclicality. However, observed frequent price and capacity adjustments offset some of this compounding effect. |
| Keywords: | Discrete Choice Modeling, Demand Estimation, Zeros, Bayesian Methods, Cyclical Demand, Airline Markets |
| JEL: | C10 C11 C13 C18 L93 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2313&r= |
| By: | Jan Pojar (Czech Technical University in Prague, Faculty of Civil Engineering); Jakub Kvasnica (Czech Technical University in Prague, Faculty of Civil Engineering) |
| Abstract: | The European Union promotes the concept of energy communities as a tool for achieving ambitious goals in decarbonisation of the European economy. Potentially, energy communities can bring multiple benefits; they are seen as a way for more efficient power sharing and decentralization and decarbonisation of energy generation as well as increasing locally produced renewable energy.The aim of the article is to examine establishing and operation of energy communities in the context of the Czech Republic. The article explores current and upcoming legislation on energy communities, the first of its kind that would set the regulatory framework for energy communities for a foreseeable future.The article describes case studies of energy communities with regard to their implementation in the conditions of the Czech Republic. Case studies focus on technical solutions for modern and renewable energy sources suitable for operation in energy communities.The article concludes with a summary of barriers, e.g. in the field of property rights and their possible solutions, and benefits of energy communities implementation, such as better distribution of investment costs and the possibility of implementing larger projects, subsequent savings in energy costs, facilitation of renewable energy sources and decentralization of energy production.The article also discusses the necessary steps for removing the barriers, which would subsequently accelerate the implementation of energy communities. |
| Keywords: | Energy community; Energy production; Energy generation; Energy Decentralization; Decarbonisation |
| JEL: | D00 Q42 Q43 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:ibmpro:12713417&r= |
| By: | Mark Braverman (Princeton University); Sylvain Chassang (Princeton University and NBER) |
| Abstract: | This paper explores whether Big Data, taking the form of extensive high dimensional records, can reduce the cost of adverse selection by private service providers in government-run capitation schemes, such as Medicare Advantage. We argue that using data to improve the ex ante precision of capitation regressions is unlikely to be helpful. Even if types become essentially observable, the high dimensionality of covariates makes it infeasible to precisely estimate the cost of serving a given type: Big Data makes types observable, but not necessarily interpretable. This gives an informed private operator scope to select types that are relatively cheap to serve. Instead, we argue that data can be used to align incentives by forming unbiased and non-manipulable ex-post estimates of a private operator’s gains from selection. |
| Keywords: | adverse selection, big data, capitation, health-care regulation, detail-free mechanism design, delegated model selection |
| JEL: | C55 D82 H51 I11 I13 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:287&r= |
| By: | Mr. James Roaf; Ian Parry; Mr. Michael Keen |
| Abstract: | This paper assesses the rationale, design, and impacts of border carbon adjustments (BCAs). Large disparities in carbon pricing between countries raise concerns about competitiveness and emissions leakage. BCAs are potentially the most effective domestic instrument for addressing these challenges—but design details are critical. For example, limiting coverage of the BCA to energy-intensive, trade-exposed industries facilitates administration, and initially benchmarking BCAs on domestic emissions intensities would ease the transition for trading partners with emission-intensive production. It is also important to consider how to apply BCAs across countries with different approaches to emissions mitigation. BCAs alone do not solve the free-rider problem in carbon pricing, but might be a step to an effective international carbon price floor. |
| Keywords: | border carbon adjustment; climate mitigation; carbon pricing; competitiveness, emissions leakage; allowance allocation, design issues, World Trade Organization rules. |
| Date: | 2021–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/239&r= |