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on Regulation |
| By: | Hain, Martin; Kargus, Tobias; Schermeyer, Hans; Uhrig-Homburg, Marliese; Fichtner, Wolf |
| Abstract: | Renewables introduce new weather-induced patterns and risks for market participants active in the energy commodity sector. We present a flexible framework for power spot prices that is capable of incorporating a weather model for the joint distribution of local weather conditions. This not only allows us to make use of a long history of local weather data in the calibration procedure but also makes it possible to assess how changes in the renewable generation portfolio impact the characteristics of future wholesale spot prices. Empirical tests demonstrate the model's capability to reproduce salient features of market variables. We furthermore show why our model offers unique benefits for market players compared to existing approaches. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitiip:65&r=reg |
| By: | Nepal, Rabindra (School of Business, Faculty of Business and Law, University of Wollongong, Australia); Sofe, Ronald (National Research Institute, Papua New Guinea); Jamasb, Tooraj (Department of Economics, Copenhagen Business School) |
| Abstract: | The island economy of Papua New Guinea (PNG) is facing severe electricity shortages and is therefore turning to implementing broader power sector reforms as a vehicle to attract private capital and investments in electricity generation. This study, based on a case-study approach, revisits the reform progress and plans in the electricity sector of PNG alongside the development and integration of IPPs in its small power system. Lessons of reform experiences and IPPs integration are drawn from three other smaller power systems belonging to Nepal, Nicaragua and the Northern Territory of Australia including stakeholder consultations, which includes two IPPs of PNG. We find a widening gap between reform ‘theory’ and ‘practice’ in the PNG power sector. Cost reflective pricing is implemented but cost recovery is never achieved by the vertically integrated state-owned utility while the insolvency of this state-owned single buyer poses the greatest perceived revenue risk to the IPPs. This lack of revenue reimbursement to the IPPs by the single buyer is a barrier towards attracting private capital into electricity generation We recommend that strong political will and strengthening of institutional arrangements are urgent reform measures to attract private capital in power generation as political instability continue. |
| Keywords: | reforms; small systems; political instability; independent power producers; regulation |
| JEL: | L50 L94 |
| Date: | 2022–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2022_014&r=reg |
| By: | von Graevenitz, Kathrine; Rottner, Elisa |
| Abstract: | Climate policy often implies increasing energy prices. Due to incomplete regulation across the globe, concerns about their competitiveness and employment effects play an important role in the policy debate. Using micro-data on electricity network charges and the official census data for Germany, we study the impact of rising electricity costs on plant performance in German Manufacturing. Electricity network charges are determined through regulation in Germany and therefore exogenous to manufacturing plants, while making up a substantial share of final electricity prices. Our estimates imply a negative own-price elasticity of electricity of -0.4 to -0.6 in the short-run: A one cent increase in average network charges leads to a decrease in electricity procurement of roughly 3 %. There is suggestive evidence that this elasticity of response is decreasing over time, in line with nonlinearly increasing marginal abatement costs. Generally, we do not find significant effects on revenues, investments or capital stocks. |
| Keywords: | Network charges,Electricity Use,Firm Performance,Climate Policy,Manufacturing |
| JEL: | D22 L60 Q41 Q48 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22038&r=reg |
| By: | Tobias Kretschmer |
| Abstract: | Recent and ongoing investments into telecommunications infrastructure have facilitated the repeated waves of digitization, both in personal and professional life. I address the question of which actors should contribute to investment costs into telecoms infrastructure and how. One widely discussed proposal (made, for example, by ETNO, the European Telecom Network Operations’ Association) is to mandate a few select large firms that offer complementary applications and services through the telecom infrastructure to compensate infrastructure providers by way of a lump sum. I discuss and evaluate this proposal from the perspectives of incentives, risk sharing, fairness, and implementability. Given the undisputed positive external effects of infrastructure investments on different actors in the internet ecosystem, I outline two theoretical first-best solutions and argue that the current proposal from ETNO is far from realizing the potential benefits of these options. |
| Keywords: | telecommunications infrastructure, investment, OTTs |
| JEL: | L40 L86 L96 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10013&r=reg |
| By: | Keith Head (UBC - University of British Columbia); Thierry Mayer (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Constant elasticity of substitution (CES) demand for monopolistically competitive firm-varieties is a standard tool for models in international trade and macroeconomics. Inter-variety substitution in this model follows a simple share proportionality rule. In contrast, the standard toolkit in industrial organization (IO) estimates a demand system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO approach comes at the expense of requiring richer data and greater computational challenges. This paper uses the dataset of Berry et al. (1995), who established the modern IO method, to simulate counterfactual trade policy experiments. We use the CES model as an approximation of the more complex underlying demand system and market structure. Although the CES model omits key elements of the data generating process, the errors are offsetting, leading to reasonably accurate counterfactual predictions. For aggregate outcomes, it turns out that incorporating non-unitary pass-through matters more than fixing oversimplified substitution patterns. We do so by extending the commonly used methods of Exact Hat Algebra and tariff elasticity estimation to take into account oligopoly. |
| Keywords: | Constant Elasticity of Substitution,Industrial Organization,Oligopoly,Trade,Tariffs,Counterfactual analysis |
| Date: | 2022–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03799563&r=reg |
| By: | Kadner-Graziano, Alessandro |
| JEL: | L44 L12 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc22:264127&r=reg |
| By: | Blind, Knut; Niebel, Crispin Miles; Rammer, Christian |
| Abstract: | In May 2018, a new regulation by the European Commission on data protection came into force, the General Data Protection Regulation (GDPR). It requires many firms to update their data protection strategy. It may also complicate different types of data usage, particularly related to data on individuals. In the literature, there is little evidence and no consensus on whether this new privacy regulation is beneficial or detrimental to innovation. This study provides empirical evidence on the impact of the GDPR on innovation activities in firms. Exploiting panel data from the German innovation survey, a difference-in-difference analysis shows that the GDPR stimulated additional innovation activity while shifting the focus of innovation away from radical and towards more incremental innovation. This holds for both firms that report that the GDPR complicated their innovation efforts, and for the much smaller group of firms that report that the GDPR facilitated their innovation activities. Finally, larger and older firms experience higher increases in their turnover with incremental innovation compared to smaller and younger firms. |
| Keywords: | General Data Protection Regulation,Innovation,Community Innovation Survey,Difference-in-difference estimation |
| JEL: | O31 O38 C22 L51 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22047&r=reg |
| By: | Lin, Jiang Dr.; Xiang, Chenxi Ms |
| Abstract: | China began implementing market-based economic dispatch through power sector reform in 2015, but the reform has encountered some political and economic challenges. This paper identifies the reform’s efficiency changes and explores and quantifies the influences of market-driven and politically driven mechanisms behind these changes, employing a partial market equilibrium model integrating high-frequency data in southern China. We found that the dispatch transition improves the overall efficiency, but regulatory capture in provincial markets limits its full potential. The preference for local enterprises over central state-owned enterprises (SOEs) by local governments, in the form of allocated generation quotas, demonstrates the political challenge for market reform. The allocated generation quota protects small coal-fired and natural gas generators owned by local SOEs, lessening their motivation to improve generation efficiency, even after the reform. As a result, nearly half of the potential carbon dioxide emission reduction and social welfare gains through market reform is not realized. |
| Keywords: | Social and Behavioral Sciences, Economic dispatch, electricity market, Regulatory capture, Efficiency gains, China |
| Date: | 2022–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt2bx8q3xr&r=reg |
| By: | Bruche, Gert |
| Abstract: | This primer is intended to serve as a background text for a 'platform chapter' in Bachelor or Master level courses on Strategic Management. While the 'traditional firm' can be described as a value-adding chain (Pipeline), platform businesses 'invert' production and consumption to the outside and in essence 'manufacture' transactions. The constitutive drivers of the platform competition and the platform economy are network effects which come in different types and varying geographic reach. There is a very wide variety of different types of platform businesses, however on a fundamental level it makes sense to distinguish transaction (exchange) and innovation (maker) platforms. 'Platform strategy analysis' is still at an early stage, it is focused on 'single platforms', and it is still a 'moving target'. The large dominant players like Google, Amazon, Microsoft, Apple and others expand and defend their dominant positions through complex 'multi-platform strategies'. Early-stage platform Start-ups on the other hand must overcome the 'chicken-or-egg' problem with various strategies and tactics. In the internationalization strategy of platforms two archetypes, country-by-country (or multidomestic) and global (globally integrated) strategies, prevail in platform markets. There is a need for platform regulation by governments and the EU in five different domains: antitrust policy, publishing (hate speech, fake news), data ownership/privacy, labour market, tax avoidance. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bpswps:1&r=reg |
| By: | Helmers, Viola; van der Werf, Edwin |
| JEL: | Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc22:264118&r=reg |
| By: | OECD |
| Abstract: | AI and emerging technologies offer tremendous opportunities for well-being, productivity, growth and solving pressing societal challenges. However, they also pose risks to human rights, fairness and human agency, among others. Many countries recognise the need to develop forward-looking policies and adapt governance frameworks to keep pace with these developments and to leverage technological benefits while mitigating risks. This paper builds on the OECD’s extensive work on AI, data governance and connectivity to support policy makers in this process. It highlights the importance of co-operating internationally to ensure that emerging technologies are trustworthy and calls for building a common understanding of AI and emerging technologies, sharing good practices and creating the evidence base to inform policy design, implementation and evaluation. |
| Date: | 2022–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:340-en&r=reg |
| By: | James Bushnell; David Rapson |
| Abstract: | Electrification is a centerpiece of global decarbonization efforts. Yet there are reasons to be skeptical of the inevitability, or at least the optimal pace, of the transition. We discuss several under-appreciated costs of full, or even deep, electrification. Consumer preferences can operate in favor of and in opposition to electrification goals; and electrification is likely to encounter physical and economic obstacles when it reaches some as-yet-unknown level. While we readily acknowledge the external benefits of decarbonization, we also explore several under-appreciated external costs. The credibility and eventual success of decarbonization efforts is enhanced by foreseeing and ideally avoiding predictable but non-obvious costs of promising abatement pathways. Thus, even with all of its promise, the degree of electrification may ultimately reach a limit. |
| Keywords: | Electrification |
| JEL: | L43 Q40 |
| Date: | 2022–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:95030&r=reg |
| By: | Marie-Laure Allain (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Claire Chambolle (Université Paris-Saclay, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Stéphane Turolla (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Abstract: | We develop a model of vertical relations between national brand and private label producers and competing multi-product retailers to derive new predictions on the impact of input price discrimination on retail prices. A reform that lifted a ban on input price discrimination in France provides a natural experiment to test these predictions. Using household scanner data on food prices, we run a difference-in-differences analysis and show that the reform caused a significant decrease of the relative prices of national brand products. These results suggest a pro-competitive effect of authorizing input price discrimination. |
| Abstract: | Nous développons un modèle de relations verticales entre les producteurs de marques nationales et de marques de distributeur et des distributeurs multi-produits concurrents pour dériver de nouvelles prédictions sur l'impact de la discrimination des prix sur le marché amont sur les prix de détail. En France, une réforme a levé l'interdiction de la discrimination des prix sur le marché amont et fournit une expérience naturelle pour tester ces prédictions. A partir de données des scanners des ménages sur les prix des denrées alimentaires, nous effectuons une analyse des différences de différence et montrons que la réforme a généré une baisse significative des prix relatifs des produits de marque nationale. Ces résultats suggèrent un effet pro-concurrentiel de l'autorisation de la discrimination des prix sur le marché amont. |
| Keywords: | Input price discrimination,Policy evaluation,Food retail sector,Discrimination des prix sur le marché amont,Evaluation des politiques,Grande distribution alimentaire |
| Date: | 2022–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03826554&r=reg |
| By: | Rogers, Parker |
| Abstract: | How does FDA regulation affect innovation and market concentration? I examine this question by exploiting FDA deregulation events that affected certain medical device types but not others. I use text analysis to gather comprehensive data on medical device innovation, device safety, firm entry, prices, and regulatory changes. My analysis of these data yields three core results. First, these deregulation events significantly increase the quantity and quality of new technologies in affected medical device types relative to control groups. These increases are particularly strong among small and inexperienced firms. Second, these events increase firm entry and lower the prices of medical procedures that use affected medical device types. Third, the rates of serious injuries and deaths attributable to defective devices do not increase measurably after these events. Perhaps counterintuitively, deregulating certain device types lowers adverse event rates significantly, consistent with firms increasing their emphasis on product safety as deregulation exposes them to more litigation. |
| Date: | 2022–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:c8s3m&r=reg |
| By: | OECD |
| Abstract: | Digital technologies have transformed the global economy. This paper discusses three underlying digital enablers of the economy and the challenges they pose for policy makers: (1) Online platforms, which support global transactions and interactions but are also disrupting existing consumer and competition policy frameworks; (2) Cross-border data flows, which facilitate global trade and co-operation but also amplify policy concerns that have motivated countries to place conditions on these data flows; and (3) Digital security, which should be prioritised to embed trust into the digital economy, but has often remained an afterthought owing to knowledge asymmetries across the market. Given that these challenges are all international in nature, a global response is needed to address them. The OECD is well-suited to foster international co-operation on these digital enablers and support countries’ ambitions for global digital policy frameworks. |
| Date: | 2022–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:337-en&r=reg |
| By: | OECD |
| Abstract: | Data access, sharing and re-use (“data openness”) can generate significant social and economic benefits, including addressing public health emergencies such as the COVID-19 pandemic and achieving the Sustainable Development Goals. However, data openness also comes with risks to individuals and organisations – notably risks to privacy and data protection, intellectual property rights, digital and national security. It also raises ethical concerns where data access, sharing and re-use undermine ethical values and norms. This report demonstrates how approaches to data stewardship and control that are more balanced and differentiated can maximise the benefits of data, while protecting individuals’ and organisations’ rights and taking into account other legitimate interests and public policy objectives. It presents the mix of technical, organisational and legal approaches that characterises these more balanced and differentiated approaches, and how governments have implemented them. |
| Date: | 2022–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:342-en&r=reg |
| By: | Blumenthal, Benjamin |
| Abstract: | Policymaking is a fraught process: politicians often fail to change the status quo despite their best efforts. Influential players, e.g. interest groups, bureaucrats or legislators, can make politicians’ proposals more or less likely to be implemented. I consider a model of policymaking with an imperfectly effective politician and an influential player who, through costly effort, can make the politician’s proposal more or less likely to replace the status quo. Introducing and exploiting a simple taxonomy of influential players’ preferences over policies, I show how and when threats, sabotage, or support can affect policymaking, depending on the influential player’s cost and strength of effort. Subsequently, I show that the relationship between the influential player’s ability to shape proposals and her cost of effort can be non-monotonic, discuss empirical implications of the model, highlight the importance of status quo policies, and connect this work to related strands of the literature. |
| Date: | 2022–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:7uw3j&r=reg |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | Judges are human beings. Is their behavior therefore subject to the same effects that psy-chology and behavioral economics have documented for convenience samples, like uni-versity students? Does that fact that they decide on behalf of third parties moderate their behavior? In which ways does the need matter to find a solution when the evidence is in-conclusive and contested? How do the multiple institutional safeguards resulting from procedural law, and the ways how the parties use it, affect judicial decision-making? Many of these questions have been put to the experimental test. The paper provides a systemat-ic overview of the rich evidence, points out gaps that still exist, and discusses methodo-logical challenges. |
| Keywords: | judicial decision-making, bias, heuristic, attitudinal model, ambiguity, parallel constraint satisfaction, public perception |
| JEL: | K10 K13 K14 |
| Date: | 2022–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2022_06&r=reg |