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on Regulation |
| By: | Liu, Yifei; Lu, Qinan; Du, Xiaodong |
| Keywords: | Environmental Economics and Policy, Resource/Energy Economics and Policy, Community/Rural/Urban Development |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:322146&r= |
| By: | Imelda Imelda (IHEID, Graduate Institute of International and Development Studies, Geneva); Matthias Fripp (University of Hawaii at Manoa); Michael J. Roberts (University of Hawaii at Manoa) |
| Abstract: | Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability implies growing benefits of using real-time retail pricing (RTP). We evaluate the potential gains of RTP using a model that jointly solves investment, supply, storage, and demand to obtain a chronologically detailed dynamic equilibrium for the island of Oahu, Hawai'i. Across a wide range of cost and demand assumptions, we find the gains from RTP in high-renewable systems to exceed those in a conventional fossil system by roughly 6 times to 12 times, markedly lowering the cost of renewable energy integration. |
| Keywords: | Renewable energy; real-time pricing; storage; demand response; optimization |
| JEL: | Q41 Q42 Q53 |
| Date: | 2022–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp17-2022&r= |
| By: | Farasat A.S. Bokhari (Centre for Competition Policy and School of Economics, University of East Anglia); Paul W. Dobson (Centre for Competition Policy and Norwich Business School, University of East Anglia) |
| Abstract: | Volume discounts encourage consumers to buy more. Banning such discounts should then lead to consumers buying less. This is the thinking behind banning multiple-unit discounts, including multibuy price promotions, to curb harmful excessive consumption of alcohol and high fat, sugar and salt (HFSS) foods. However, our analysis questions the validity of this thinking, which ignores the possible restraining effect of volume discounts. We found that such a ban for retailing alcohol in Scotland increased rather than reduced sales. Retailers switched to using more straight (single unit) discounts, which encouraged high consumption households to increase their shopping frequency and buy more. |
| Keywords: | Volume discounts, excessive consumption, multibuy, alcohol |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaccp:2022_04&r= |
| By: | Elias Deutscher (Centre for Competition Policy and School of Law, University of East Anglia) |
| Abstract: | This paper explores the law and economics of brand bidding restraints. By means of this novel type of restraints, brand owners restrict how their licensed retailers use their brand names and trademarks as keywords in paid search advertising. The paper tests and critically reflects on the restrictive approach European competition watchdogs have recently adopted towards brand bidding restraints. It contends that this harsh antitrust treatment of brand bidding restraints is not sufficiently grounded in the economic analysis of vertical restraints. In proposing a comprehensive framework for the legal and economic analysis of brand bidding restraints, the paper makes three principal contributions. First, it asserts that brand bidding restraints can have a number of procompetitive effects by internalising advertising-related externalities, addressing free-riding on display and traditional advertising and facilitating fixed cost recovery through price discrimination. Second, the paper considers different ways through which brand bidding restraints may harm competition and consumer welfare when they disproportionately affect infra-marginal consumers, prevent meaningful intra- and inter-brand comparisons or result in price discrimination on the basis of search costs rather than brand preferences. Moreover, brand bidding restraints are of particular concern when adopted in the context of dual distribution systems where vertically integrated brand owners have an incentive to raise their retailers’ costs to prevent them from cannibalising their own sales channel. Third, the paper explores various legal filters to disentangle and balance the anti- and procompetitive effects of brand bidding restraints. In this respect, the paper makes a number of policy recommendations for the future antitrust analysis of brand bidding restraints. These proposals could also inform the ongoing revision of the Vertical Block Exemption Regulation and Vertical Guidelines in the EU and in the UK. |
| Keywords: | Antitrust, online advertising, restraints |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaccp:2021_09&r= |
| By: | Noriaki Matsushima; Tomomichi Mizuno; Cong Pan |
| Abstract: | Personalized pricing has become a reality through digitization. We examine firms' incentives to adopt one of the three pricing schemes: uniform, personalized, or group pricing in a Hotelling duopoly model. There are two types of consumer groups that are heterogeneous in their mismatch costs. We show that both firms employ personalized pricing in equilibrium regardless of the heterogeneity of consumer groups. If the consumer groups' heterogeneity is significant, the profits are higher when both firms use personalized pricing than when they employ uniform pricing; otherwise, the latter profits are higher than the former. Profits are highest when firms employ group pricing among the three cases. The ranking of consumer welfare among the three cases is opposite to that of profits. |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1184&r= |
| By: | Jonathan Chiu; Thorsten Koeppl |
| Abstract: | Why do BigTech platforms introduce payment services? Digital platforms often run business models where activities on the platform generate data that can be monetized off the platform. There is a trade-off between the value of such data and the privacy concerns of users, since platforms need to compensate users for their privacy loss by subsidizing activities. The nature of complementarities between data and payments determines whether and how payment services are provided. When data help to provide better payments (data-driven payments), platforms have too little incentive to adopt. When payments generate additional data (payments-driven data), platforms may adopt payments inefficiently. |
| Keywords: | Digital currencies and fintech; Payment clearing and settlement systems |
| JEL: | D8 E42 L1 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:22-35&r= |
| By: | Franco Mairuzzo (Centre for Competition Policy and School of Economics, University of East Anglia); Peter Ormosi (Centre for Competition Policy and Norwich Business School, University of East Anglia) |
| Abstract: | One of the central tenets of industrial organisation is that increasing/decreasing market concentration is likely to lead to increased/reduced markups. But does this affect every consumer to the same extent? Previous literature agrees that there can be significant price dispersion even in the case of homogeneous goods, which is at least partially due to the heterogeneity in how much consumers engage with the market. We link this heterogeneity to the impact of changing market concentration on markups. For this purpose, we employ a combination of 18 years of station-level motor fuel price data from Western Australia and a rich set of information on local market concentration. We summon a non-parametric causal forest approach to explore the heterogeneity in the effect of market exit/entry. The paper offers evidence of the distributional effect of changing market concentration. Areas with lower income experience a larger increase in petrol stations’ price margin as a result of market exit. On the other hand, entry does not benefit the same low-income areas with a larger reduction in the margin than in high-income areas. We argue that these findings are due to differences in how much consumers in different demographic groups engage with the market. Our findings give support to the argument that antitrust could help address inequality while staying true to its mission of promoting competition, provided that priorities are given to not only fixing supply-side problems but also to exploring demand-side remedies. |
| Keywords: | inequality, market concentration, income, consumer search, causal forests, petrol |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaccp:2021_08&r= |
| By: | Lambert, Thomas (Mercury Publication) |
| Abstract: | Specific Questions: What are the relative merits of antitrust versus direct regulation for addressing market power concerns on digital platforms. Relevance: As digital platforms like Facebook, Google, and Amazon have grown, policy makers have been considering regulatory options?beyond prevailing antitrust standards?for stemming the dominant platforms? market power. Timeliness: The House Judiciary Committee recently released a report calling for a number of ex ante rules to govern digital platforms. Other governmental agencies (e.g., the UK?s Competition and Markets Authority) and research organizations (e.g., the University of Chicago?s Stigler Center) have similar called for such an approach. Legislative proposals are likely on the horizon. |
| Date: | 2021–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:11271&r= |
| By: | Aditya Bhattacharjea (Department of Economics, Delhi School of Economics); Srishti Gupta (Department of Economics, Delhi School of Economics) |
| Abstract: | We derive several variations of a model in which two upstream firms supply a differentiated product to two downstream firms under exclusive contracts of different kinds. We first derive a benchmark model with upstream first-mover pricing. We then compare its outcomes with four other types of vertical arrangements representing different modes of exploiting buyer power: downstream first mover pricing; Nash bargaining, alternatively with linear and two-part tariffs; and vertical integration. In each case, we show how the equilibrium values of wholesale and retail prices as well as downstream firms’ profits are affected by changes in the exogenous parameters (degree of product differentiation, bargaining power, and production costs). We evaluate the various vertical regimes from the perspective of downstream firms’ profits as well as consumer welfare, and show how more powerful downstream firms can benefit consumers by exercising “countervailing power” against upstream firms. Key Words: Buyer power, Bertrand duopoly, Vertical contracts, Nash bargaining, Vertical integration. JEL Codes: D43, L13, L22 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:cde:cdewps:326&r= |
| By: | Chlond, Bettina; Goeschl, Timo; Kesternich, Martin |
| Abstract: | We contribute to the literature on how program design affects program performance among vulnerable groups by studying the effects of varying the subsidy level and program procedures in an energy efficiency assistance program targeting low-income households in Germany. Eligible households receive, upon enrolment, a voucher to subsidize refrigerator replacement. The voucher is redeemed against cash following replacement. Observing the decisions of 77,305 eligible households, our RDD design exploits two quasi-exogenous temporal discontinuities in voucher value and program procedures. We find that a switch from automatic to elective enrolment and more rigid voucher terms reduces the number of vouchers in circulation, but raises the replacement rate among eligible households, the key performance metric, by 4 to 10 percentage points, consistent with psychological theories of goal setting and time management. A subsidy increase of 50 Euro raises replacement rates by 9 to 16 percentage points. The effect of procedural changes is equivalent to an additional 34 Euro in subsidy. Back-of-the-envelope calculations highlight that low-cost changes in procedures that target the behavioral responses of low-income households represent plausible areas of unexploited economies in program design and merit systematic investigation. |
| Keywords: | Public behavioral economics,energy efficiency,low-income households,durable replacement,energy poverty,technology adoption |
| JEL: | C25 D15 H23 O33 Q20 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22020&r= |
| By: | Atabek Atayev |
| Abstract: | The existing studies on consumer search agree that consumers are worse-off when they do not observe sellers' production marginal cost than when they do. In this paper we challenge this conclusion. Employing a canonical model of simultaneous search, we show that it may be favorable for consumer to not observe the production marginal cost. The reason is that, in expectation, consumer search more intensely when they do not know sellers' production marginal cost than when they know it. More intense search imposes higher competitive pressure on sellers, which in turn benefits consumers through lower prices. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.04576&r= |
| By: | Jorge Herrada; Angela N Lawson |
| Abstract: | Payment systems, and interoperation within and between them, are complicated, making analysis and dialogue among analysts, technologists, and members of the public challenging. Given the emergence of new payment mechanisms, like CBDC and private digital currency, these discussions are increasingly important to identify opportunities and challenges. This paper proposes a four-step framework and provides several tools policy analysts, technologists, and interested members of the public can use to interpret and discuss payment system interoperation. First, we provide an overview of payment system interoperation and why it is important. Next, we describe our four-step framework. Then, we apply the framework by describing the potential results of a hypothetical fit-for-purpose interoperation discussion where both a hypothetical central bank digital currency (CBDC) and stablecoins, a type of private digital currency, could co-exist in a payment system. |
| Date: | 2022–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2022-07-14-2&r= |
| By: | Gabriel Di Bella; Mr. Mark J Flanagan; Mr. Frederik G Toscani; Alex Pienkowski; Karim Foda; Martin Stuermer; Svitlana Maslova |
| Abstract: | This paper analyzes the implications of disruptions in Russian gas for Europe’s balances and economic output. Alternative sources could replace up to 70 percent of Russian gas, allowing Europe to avoid shortages during a temporary disruption of around 6 months. However, a longer full shut-off of Russian gas to the whole of Europe would likely interact with infrastructure bottlenecks to produce very high prices and significant shortages in some countries, with parts of Central and Eastern Europe most vulnerable. With natural gas an important input in production, the capacity of the economy would shrink. Our findings suggest that in the short term, the most vulnerable countries in Central and Eastern Europe — Hungary, Slovak Republic and Czechia — face a risk of shortages of as much as 40 percent of gas consumption and of gross domestic product shrinking by up to 6 percent. The effects on Austria, Germany and Italy would also be significant, but would depend on the exact nature of remaining bottlenecks at the time of the shutoff and consequently the ability of the market to adjust. Many other countries are unlikely to face such constraints and the impact on GDP would be moderate—possibly under 1 percent. Immediate policy priorities center on actions to mitigate impacts, including to eliminate constraints to a more integrated gas market via easing infrastructure bottlenecks, to accelerate efforts in defining and agreeing solidarity contributions, and to promote stronger pricing pass through and other measures to generate greater energy savings. National responses and RePowerEU contains many important measures to help address these challenges, but immediate coordinated action is called for, with specific opportunities in each of these areas. |
| Keywords: | Energy supply; natural gas; production output |
| Date: | 2022–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/145&r= |
| By: | Vera Baye (University of Osnabrueck); Valeriya Dinger (University of Osnabrueck and Leeds University Business School) |
| Abstract: | We investigate how housing returns are influenced by the introduction of a rent brake as a form of rental control in Germany in 2015. We derive the housing returns by matching micro-level quotes on similar objects offered for rent and for sale. We exploit the temporal,regional and object-specific variation in the framework of a multi period difference-in-differences analysis to identify the effect of the rent brake. Our results show that the main goal of the political intervention to secure affordable living space in tense housing markets cannot be attained due to construction incentives in newbuilds and fostered gentrification. |
| Keywords: | rent control, housing supply, regional data, rent-price ratio, gentrification, housing affordability |
| JEL: | R38 R31 E65 R21 R23 R10 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:342&r= |
| By: | Vahid Ashrafimoghari; Jordan W. Suchow |
| Abstract: | In a digital age where companies face rapid changes in technology, consumer trends, and business environments, there is a critical need for continual revision of the business model in response to disruptive innovation. A pillar of innovation in business practices is the adoption of novel pricing schemes, such as Pay-What-You-Want (PWYW). In this paper, we employed game theory and behavioral economics to model consumers' behavior in response to a PWYW pricing strategy where there is an information asymmetry between the consumer and supplier. In an effort to minimize the information asymmetry, we incorporated the supplier's cost and the consumer's reference prices as two parameters that might influence the consumer's payment decision. Our model shows that consumers' behavior varies depending on the available information. As a result, when an external reference point is provided, the consumer tends to pay higher amounts to follow the social herd or respect her self-image. However, the external reference price can also decrease her demand when, in the interest of fairness, she forgoes the purchase because the amount she is willing to pay is less that what she recognizes to be an unrecoverable cost to the supplier. |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2207.08923&r= |
| By: | Broughel, James; Bose, Feler; Baugus, Brian (Mercury Publication) |
| Abstract: | Abstract not available. |
| Date: | 2022–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:10277&r= |
| By: | OECD |
| Abstract: | Online marketplaces matching third-party sellers with consumers are now key e-commerce channels globally. Despite their popularity and the benefits they bring to consumers, they do present a number of risks, for example when their third-party sellers engage in misleading marketing and fraud, or supply unsafe products. This report summarises results from a 2021 OECD survey of 28 countries and 15 platform businesses examining the role of online marketplaces in enhancing consumer protection. The report highlights a range of encouraging initiatives by many participating countries and online marketplaces to better protect consumers, often taken in co-operation with one another, but also identifies several key areas where more action is needed. |
| Date: | 2022–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:329-en&r= |
| By: | McLaughlin, Patrick; Law, Marc (Mercury Publication) |
| Abstract: | Abstract not available. |
| Date: | 2021–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:11423&r= |