nep-reg New Economics Papers
on Regulation
Issue of 2023‒02‒13
twenty-one papers chosen by
Christopher Decker
Oxford University

  1. Evaluating the Impact of Divestitures on Competition: Evidence from Alberta's Wholesale Electricity Market By Brown, David P.; Eckert, Andrew; Shaffer, Blake
  2. The 2022 Energy Crisis: horizontal and vertical impacts of policy interventions in Australia’s National Electricity Market By Simshauser, P.
  3. Rooftop Solar with Net Metering: An Integrated Investment Appraisal By Majid Hashemi; Glenn P. Jenkins; Frank Milne
  4. Regional Passenger Rail Efficiency: Measurement and Explanation in the case of France By Christian Desmaris; Guillaume Monchambert
  5. Deep Reinforcement Learning for Power Trading By Yuanrong Wang; Vignesh Raja Swaminathan; Nikita P. Granger; Carlos Ros Perez; Christian Michler
  6. How can technology significantly contribute to climate change mitigation? By Claire Alestra; Gilbert Cette; Valérie Chouard; Rémy Lecat
  7. Globalization and market power By Impullitti, Giammario; Kazmi, Syed
  8. How it can be done By Rüdiger Bachmann; David Baqaee; Christian Bayer; Moritz Kuhn; Andreas Löschel; Ben McWilliams; Benjamin Moll; Andreas Peichl; Karen Pittel; Moritz Schularick; Georg Zachmann
  9. The anatomy of a hospital system merger: the patient did not respond well to treatment By Gaynor, Martin; Sacarny, Adam; Sadun, Raffaella; Syverson, Chad; Venkatesh, Shruthi
  10. How Regulation Might Fail to Reduce Energy Consumption While Still Stimulating Total Factor Productivity Growth By Sangeeta Bansal; Massimo Filippini; Suchita Srinivasan
  11. Long-run Effect of a Horizontal Merger and Its Remedial Standards By FUKASAWA Takeshi; OHASHI Hiroshi
  12. Targeted, Implementable, and Practical Energy Relief Measures for Households in Europe By Oya Celasun; Mr. Li Zeng; Ms. Aiko Mineshima; Yu Ching Wong; Mr. Frederik G Toscani; Mr. Nicolas Arregui; Jing Zhou; Mr. Victor Mylonas; Ms. Dora M Iakova
  13. Instant Payments: Regulatory Innovation and Payment Substitution Across Countries By Mr. Tanai Khiaonarong; David Humphrey
  14. Internalizing Externalities: Disclosure Regulation for Hydraulic Fracturing, Drilling Activity and Water Quality By Pietro Bonetti; Christian Leuz; Giovanna Michelon
  15. Price Authority and Information Sharing with Competing Principals By Enrique Andreu; Damien Neven; Salvatore Piccolo
  16. Buyer Power and Exclusion: A Progress Report By Claire Chambolle; Clémence Christin; Hugo Molina
  17. Toward an EU Gas-Purchasing Cartel By Peter Cramton; François Lévêque; Axel Ockenfels; Steven Stoft
  18. Does highspeed internet boost exporting? By Lynda Sanderson; Garrick Wright-McNaughton; Naomitsu Yashiro
  19. Germans’ Willingness to Pay for Gas and Heating By Teodora Boneva; Armin Falk; Mark Fallak; Lasse Stötzer
  20. Cheap Talk, Monitoring and Collusion By David Spector
  21. Decommissioning of Nuclear Power Plants: Regulation, Financing, and Production By Alexander Wimmers; Rebekka Bärenbold; Muhammad Maladoh Bah; Rebecca Lordan-Perret; Björn Steigerwald; Christian von Hirschhausen; Hannes Weigt; Ben Wealer

  1. By: Brown, David P. (University of Alberta, Department of Economics); Eckert, Andrew (University of Alberta, Department of Economics); Shaffer, Blake (University of Calgary)
    Abstract: Asset divestitures play a central role in antitrust and competition policy. Despite their importance, empirical evidence on their impacts on market competition is limited. We analyze market power in Alberta's wholesale electricity market, where transitional arrangements that virtually divested generation assets from large incumbents were put in place during market restructuring in the early 2000's and expired at the end of 2020. Subsequently, average peak hour prices rose by 120% the year after their expiry. We demonstrate that nearly two-thirds of this increase can be explained by elevated market power from the large suppliers. Further, exploiting variation in the allocation of the divested assets across heterogeneous firms, we demonstrate that market power execution is elevated when the divested assets are controlled by large strategic firms. Our findings highlight the important role that asset divestitures and their allocations can have on market competition. Our analysis also raises concerns over the ability of restructured electricity markets to facilitate sufficient competition through entry and the potential need for regulatory intervention.
    Keywords: Electricity; Market Power; Competition Policy; Divestitures
    JEL: D43 L13 L50 L94 Q40
    Date: 2023–01–29
  2. By: Simshauser, P.
    Abstract: The war in Ukraine and the associated 2022 energy crisis has had far-reaching effects with seaborne prices for coal and gas reaching multiples (5-6x) of their historic averages. While Europe was the epicentre, countries as far away as Australia were impacted. As a major exporter of coal and gas, domestic markets are linked to seaborne prices. Consequently, forward prices for 2023 delivery in Australia’s National Electricity Market surged from ~$48 in 2021 to $156/MWh in 2022 at one point peaking at $247/MWh. Household electricity tariffs were set to in-crease by 11% in 2023 and 35% in 2024. In late-2022, the Commonwealth Government intervened by setting fuel price caps of $125/t and $12/GJ for coal and gas, respectively. Given an estimated market heat rate of ~8.2GJ/MWh, forward prices reduced to ~$105/MWh. In this article, price increases before- and after- policy interventions are analysed. 2024 tariff increases after policy intervention are forecast to increase by 16.5% (cf.35%), benefiting all customers. State Government hardship policy remains vitally important, however. Underlying levels of fuel poverty in 2024 are forecast at 12.1% pre-policy, and 6.7% after policy intervention, with State-level hardship policies making the larger (3.2 percentage point) contribution to this result.
    Keywords: Electricity markets, energy policy, fuel poverty
    JEL: D4 L5 L9 Q4
    Date: 2203–01–13
  3. By: Majid Hashemi (Department of Economics, Queens University, Kingston, Ontario Canada and Cambridge Resources International Inc.); Glenn P. Jenkins (Department of Economics, Queens University, Kingston, Ontario, Canada and Cambridge Resources International Inc.); Frank Milne (Department of Economics, Queens University, Kingston, Ontario, Canada)
    Abstract: This paper develops a framework for a financial, economic, and stakeholder analysis of a residential rooftop solar net-metering program. The empirical focus of the paper is the net metering program in Ontario, Canada, but the methodology is applicable to evaluating other public programs. The results highlight that without the Federal Government’s subsidy for the initial investment cost, net-metered solar systems are not financially viable for representative households. Moreover, the stakeholder analysis reveals that for each additional net-metered system installed in Ontario, non-net-metered households experience financial losses of eight times the benefits to the net-metered households. The net losses to the Federal Government of Canada and the Canadian economy are six and twelve times the benefit to the net-metered households, respectively. The only stakeholder who benefits marginally is the Government of Ontario. In terms of environmental benefits, our estimate of the cost of greenhouse gas abatement by residential net-metered solar is 413 CAD per ton of CO2e, which is significantly higher than the current (65 CAD in 2023) and future (170 CAD by 2030) social cost of carbon set by the Government of Canada.
    Keywords: rooftop solar, net metering, greenhouse gas emissions, renewable energy, the social cost of carbon, Canada
    JEL: D61 L94 Q42 Q48
    Date: 2023–01–25
  4. By: Christian Desmaris (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique, IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon); Guillaume Monchambert (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates the productive efficiency of French regional rail operators. Benefiting from unique databases (2012-2016), we use a panel stochastic frontier model to measure and explain the productive efficiency. We consider the regional monopoly nature of these operators by introducing specific contract-related variables into the model. The technical efficiency level of regional operators ranges from 59 to 98 per cent, revealing a high degree of heterogeneity in productive performance between regional operators. Factors related to the societal environment (density and delinquency rate), the characteristics of the rail system (network length and number of stations) and contractual design are significantly correlated with the technical efficiency. The policy implications of these results are substantial for both public authorities and rail operators.
    Keywords: Productive efficiency, Rail regulation, Regional rail passenger market, Stochastic frontiers, France, TER, Working Papers du LAET
    Date: 2023
  5. By: Yuanrong Wang; Vignesh Raja Swaminathan; Nikita P. Granger; Carlos Ros Perez; Christian Michler
    Abstract: The Dutch power market includes a day-ahead market and an auction-like intraday balancing market. The varying supply and demand of power and its uncertainty induces an imbalance, which causes differing power prices in these two markets and creates an opportunity for arbitrage. In this paper, we present collaborative dual-agent reinforcement learning (RL) for bi-level simulation and optimization of European power arbitrage trading. Moreover, we propose two novel practical implementations specifically addressing the electricity power market. Leveraging the concept of imitation learning, the RL agent's reward is reformed by taking into account prior domain knowledge results in better convergence during training and, moreover, improves and generalizes performance. In addition, tranching of orders improves the bidding success rate and significantly raises the P&L. We show that each method contributes significantly to the overall performance uplifting, and the integrated methodology achieves about three-fold improvement in cumulative P&L over the original agent, as well as outperforms the highest benchmark policy by around 50% while exhibits efficient computational performance.
    Date: 2023–01
  6. By: Claire Alestra (Aix-Marseille University, CNRS, AMSE, France); Gilbert Cette (NEOMA Business School, France); Valérie Chouard (Banque de France, France); Rémy Lecat (Banque de France, France)
    Abstract: This paper highlights how technology can contribute to reaching the COP21 goals of net zero CO 2 emissions and global warming below 2°C at the end of the century. It uses the ACCL model, particularly adapted to quantify the consequences of energy price shocks and technology improvements on CO 2 emissions, temperature changes, climate damage and GDP. Our simulations show that without climate policies, i.e. a 'business as usual' scenario, the warming may be +4 to +5°C in 2100, with considerable climate damage. We also find that an acceleration in 'usual technical progress'-not targeted at reducing greenhouse gas intensity-makes global warming and climate damage worse than the 'business as usual' scenario. According to our estimates, the world does not achieve climate goals in 2100 without technological changes to avoid CO 2 emissions. To hit such climatic targets, intervening only through the relative price of different energy types, e.g. via a carbon tax, requires challenging hypotheses of international coordination and price increase for polluting energies. We assess a multi-lever climate strategy, associating diverse price and technology measures. This mix combines energy efficiency gains, carbon sequestration, and a decrease of 3% per year in the relative price of non-carbon-emitting electricity with a 1 to 1.5% annual rise in the relative price of our four polluting energy sources. None of these components alone is sufficient to reach climate objectives. Our last and most important finding is that our composite scenario achieves the climate goals.
    Keywords: climate, global warming, Technology, Environmental policy, growth, long-term projections, Uncertainties, Renewable energy
    JEL: H23 Q54 E23 E37 O11 O47 O57 Q43 Q48
    Date: 2023–01
  7. By: Impullitti, Giammario; Kazmi, Syed
    Abstract: Economic theory suggests that the markup is a key measure of market power and that its relationship with trade is rich and complex. Trade liberalisation can reduce markups via a decline in the residual domestic demand but also increase it via several channels. Trade-induced increases in competition leads to more concentrated markets via entry and exit, putting upward pressure on markups. Market shares reallocation toward larger, more powerful firms, increase the aggregate markup. We use a large episode of trade liberalisation in Spain to test this rich set of transmission mechanisms linking trade and markups. The overall effect of reductions in Spanish import tariffs on firm-level and aggregate markups is pro-competitive but we find evidence of offsetting effects via the other channels. In particular, we show that firms with high intangible investment experience a weaker reduction in markups. Sup-porting the theoretical insight that the feedback effect via concentration is stronger with higher barriers to entry. Increases in markups are also produced by reallocations effects but the results are weaker, suggesting that the link between trade and markups is mostly driven by changes at the intensive margin.
    Keywords: internationl trade; markups; oligopoly
    JEL: F12 F13 F14
    Date: 2022–08–26
  8. By: Rüdiger Bachmann; David Baqaee; Christian Bayer; Moritz Kuhn; Andreas Löschel; Ben McWilliams; Benjamin Moll; Andreas Peichl; Karen Pittel; Moritz Schularick; Georg Zachmann
    Abstract: An end to gas supplies from Russia has recently become much more likely. Russian supply volumes have already been substantially reduced, and uncertainty about future supplies and the winter supply situation is high. In this study, we ask what the economic consequences would be of a complete halt to Russian gas imports at present (August 2022). Almost five months have passed since our first study, "What if" (Bachmann et al., 2022), on the economic effects of a March 2022 Russian energy import freeze. The debate sparked by the study has sharpened the focus on the issues and assumptions that are critical to estimating the economic costs of a Russian energy import freeze. In this study, we update the results based on the situation in August 2022. (i) We estimate the necessary demand reduction that would result if Russian gas imports were halted from August 2022 and discuss economic policy strategies to achieve this adjustment. (ii) We update our estimated expected economic costs and discuss practical examples of substitution options in the industrial sector. (iii) We evaluate the federal government's economic policy, in particular its decision to increase storage levels with continued gas imports from Russia since March 2022, but to largely forego measures to reduce gas demand in power generation, industry, and residential and commercial sectors. The key findings of the study can be summarized as follows: In the event of a complete loss of Russian gas supplies in the next few weeks, Germany will have to reduce its gas demand by around 25% (equivalent to 210 TWh) by the end of the coming heating period (April 2023), even if the planned liquefied natural gas terminals come on stream as planned in the winter. When factoring in the savings in gas demand that can be achieved through alternative energy sources in power generation, this leaves an adjustment of about 20% of gas consumption that must be borne by industry, households, businesses, and the public sector. Such a reduction is feasible in a collective effort if measures are taken quickly to save gas. The good news from our study is that Germany can get through the winter without Russian gas. Panic mongering is out of place. Nevertheless, it should be clear to everyone that the Russian invasion of Ukraine has made Germany permanently poorer. The days of cheap energy are over and collective efforts are needed to make the economy crisis-proof. Reducing gas consumption is feasible, but it comes at an economic cost. In particular, there is much less time now to substitute gas in the industrial sector and power generation than in the spring. It is difficult to estimate how many companies have made the sometimes costly investments in alternatives even without the appropriate political framework. However, it has become clear that the view that gas substitution was not possible at all within six months was wrong. There are now numerous examples of substantial substitution possibilities, including in the chemical and glass production industries. The bottom line is that the economic costs of adjusting to an import freeze are likely to remain similar to those of committing to an import freeze already in the spring. This is because the gas gap is smaller than in the spring, but the remaining adjustment period is shorter. In this respect, the costs remain substantial, but manageable with appropriate economic policy measures. There is no threat of mass poverty or popular uprisings in the event of a halt to Russian gas imports. The economy will face production losses of a magnitude that Germany has already managed in the past when it had to face economic shocks. It is also important to interpret the effects of a gas import stop relative to a scenario without an import stop. For example, Germany could fall into recession even without an import freeze. The assessment of the German government's strategy of not enforcing an early demand adjustment and continuing gas imports from Russia despite the war of aggression on Ukraine is ambivalent. Although a good 100 TWh of gas was stored from April to July, without Russian supplies the need for adjustment on the demand side remains substantial at 25% until the end of the next heating period. In a counterfactual scenario, in which Germany would have had to manage without Russian gas imports as early as from April onwards, demand would have had to be reduced by 31%, a good 6 percentage points more. Yet in return, there would have been more time to prepare the appropriate adjustments for the winter heating period. Even if the storage facilities were filled to 100% in the fall, Germany would remain dependent on Russian imports for normal winter consumption and would thus remain vulnerable to blackmail from Moscow. This is because the storage facilities only have a total capacity of below 250 TWh, which is roughly equivalent to the consumption of two winter months. In this respect, the focus on storage levels and the neglect of adaptation measures was not suitable to end Germany's dependence on Russia and its political blackmail ability completely and quickly. While closer cooperation with European partners could have mitigated the necessary reduction in gas demand in Germany, there is still a risk that national go-it-alone efforts will undermine essential European energy solidarity. In any case, the BMWK's efforts to build LNG terminals and diversify gas supplies through imports from third countries are positive. However, this could have been done even with an import freeze or tariff solutions in March.
    Date: 2022–08
  9. By: Gaynor, Martin; Sacarny, Adam; Sadun, Raffaella; Syverson, Chad; Venkatesh, Shruthi
    Abstract: Despite the continuing US hospital merger wave, it remains unclear how mergers change, or fail to change, hospital behavior and performance. We open the "black box" of hospital practices through a mega-merger between two for-profit chains. Benchmarking the merger's effects against the acquirer's stated aims, we show they achieved some of their goals, harmonizing electronic medical records and sending managers to target hospitals. Post-acquisition managerial processes were similar across the merged chain. However, these interventions failed to drive detectable gains in performance. Our findings demonstrate the importance of organizations for merger research in health care and the economy more generally.
    Keywords: management
    JEL: I10 M12
    Date: 2022–04–07
  10. By: Sangeeta Bansal (Centre for International Trade and Development, School of International Studies, Jawaharlal Nehru University, New Delhi, India); Massimo Filippini (Center of Economic Research (CER-ETH), ETH Zürich, Università della Svizzera italiana, Switzerland); Suchita Srinivasan (Center of Economic Research, ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland)
    Abstract: This paper evaluates the impact of a policy that was implemented to reduce the energy intensity of firms in some manufacturing sectors in India, on the total factor productivity (TFP) growth of firms and on its components, scale efficiency and technical change. Using plant-level panel data on the cement industry from 2007-2015 and a difference-in-difference methodology, we find that treated plants had higher rates of TFP growth, compared to control plants. This is largely driven by the fact that they expanded their production compared to control plants, even though they experienced lower rates of technical change compared to control plants. To explain this finding, we verify that treated plants attempted to meet the energy-intensity mandate not by reducing their energy consumption, but instead by increasing their output. Our results suggest that energy intensity regulations may not reduce energy consumption, because firms may find other ways to fulfil targets. The policy implications of this study are related to the design of energy-efficiency regulations, particularly in developing countries where firms in some industries may find it difficult to reduce their energy consumption through investment in new energy-efficient technologies or processes.
    Keywords: Total factor productivity; Climate change mitigation; Environmental Regulation; Cement Industry; Energy Intensity; India
    JEL: D1 D8 Q4 Q5
    Date: 2023–01
  11. By: FUKASAWA Takeshi; OHASHI Hiroshi
    Abstract: This paper estimates a dynamic oligopoly model with firms’ continuous investment decisions to assess long-run consequences of a horizontal steel merger. It employs a novel simulation method to show that the merger improved social welfare. While the merger discouraged the merged firm from investing in capacity, it encouraged investment within non-merged firms, absent the efficiency gains of the merger. The paper also evaluates the remedial measure targeting asset divestiture that was endorsed by the competition authority. The paper finds that the effects of the merger remedy persisted for the 20 years after its implementation covered by this study, and the prescribed remedy differed considerably on the standpoint of either consumer or social welfare standards.
    Date: 2023–01
  12. By: Oya Celasun; Mr. Li Zeng; Ms. Aiko Mineshima; Yu Ching Wong; Mr. Frederik G Toscani; Mr. Nicolas Arregui; Jing Zhou; Mr. Victor Mylonas; Ms. Dora M Iakova
    Abstract: The recommended way of helping households during the ongoing European energy crisis is to allow price signals to operate freely while providing targeted compensation to the vulnerable. In practice, however, institutional, political, and technical constraints have led many European governments to adopt broad, price-suppressing measures, which impede the adjustment in demand, have high fiscal costs, and widen cross-country gaps in prices. This paper focuses on easy-to-implement, second-best policies. Bonuses or rebates on energy bills (that are not linked to the current volume of consumption) or block tariffs are simple options which would improve on the current policy design in many countries. To avoid stoking inflation, fiscal policy should not add to aggregate demand, so relief for energy bills should be targeted and coupled with offsetting fiscal measures. One option is to reclaim the relief from the better-off through income taxation, which would also make support more progressive.
    Keywords: energy prices; price pass-through; household incidence; distributional analysis; social safety nets; energy cost support measure; I. consumer energy price inflation; price signal; price-suppressing measure; EU government; Energy pricing; Consumption; Natural gas sector; Income; Europe
    Date: 2022–12–16
  13. By: Mr. Tanai Khiaonarong; David Humphrey
    Abstract: Instant, or fast, payments are credit transfers completed and settled within seconds or minutes. They have low costs, reduce payment risk, and have significantly replaced the use of cash, cards, or check and direct debit payments. We note the role played by regulators in promoting instant payments and identify instances of significant payment instrument substitution across 12 advanced and emerging market economies. This substitution reflects the realized demand for attributes offered by instant payments. As these attributes are quite similar to those for CBDC, the demand for retail CBDC (if issued) may be less compelling.
    Keywords: Instant payments; payment substitution; regulatory innovation; instant payment; payment risk; direct debit payment; payment share; Payment systems; Europe
    Date: 2022–11–18
  14. By: Pietro Bonetti; Christian Leuz; Giovanna Michelon
    Abstract: The rise of shale gas and tight oil development has triggered a major debate about hydraulic fracturing (HF). In an effort to mitigate risks from HF, especially with respect to water quality, many U.S. states have introduced disclosure mandates for HF wells and fracturing fluids. We use this setting to study whether targeting corporate activities that have dispersed environmental externalities with disclosure regulation to create public pressure reduces their environmental impact. We find significant improvements in water quality, examining salts that are considered signatures for HF impact, after the disclosure mandates are introduced. We document effects along the extensive and the intensive margin, though most of the improvement comes from the latter. Supporting this interpretation, we find that, after the disclosure mandates, operators pollute less per unit of production, use fewer toxic chemicals, and cause fewer spills and leaks of HF fluids and wastewater. We also show that disclosure enables public pressure and that this pressure facilitates internalization.
    JEL: D62 G38 K22 K32 L71 L72 M41 M48 Q53
    Date: 2023–01
  15. By: Enrique Andreu (Compass Lexecon); Damien Neven (IHEID, Graduate Institute of International and Development Studies, Geneva); Salvatore Piccolo (Bergamo University)
    Abstract: We characterize the degree of price discretion that competing principals award their agents in a framework where agents are informed about demand and seek to pass on their unveriÂ…able distribution costs to consumers at the principalsÂ’ expense. Principals learn demand probabilistically and may exchange this information on a reciprocal basis. While equilibria with full price delegation never exist, partial delegation equilibria exist with and without information sharing and feature binding price caps (list prices) that prevent agents from passing on their distribution costs to consumers. Yet, these equilibria are more likely to occur with than without information sharing. Moreover, while principals exchange information when products are sufficiently differentiated and downstream distribution costs are not too low, expected prices are unambiguously lower with than without information sharing. These results have potential implications for recent and ongoing antitrust investigations and damage claims in prominent sectors both in the US and the EU.
    Keywords: Competing Principals; Delegates Sales; Discretion; Information Sharing; List Prices
    JEL: L42 L50 L81
    Date: 2022–12–18
  16. By: Claire Chambolle (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Clémence Christin (UNICAEN - Université de Caen Normandie - NU - Normandie Université); Hugo Molina (ALISS - Alimentation et sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This article presents recent advances in the analysis of buyer-seller networks, with a particular focus on the role of buyer power on exclusion. We first examine simple vertical structures and highlight that either upstream or downstream firms may have incentives to engage in exclusionary practices to counteract or leverage buyer power. We then review current work attempting to revisit this issue in "interlocking relationships". Based on an ongoing research project, we show that the same exclusion mechanism arises when retail substitution is soft.
    Keywords: Vertical relationships, Buyer power, Distribution network, Exclusion
    Date: 2022–12–15
  17. By: Peter Cramton; François Lévêque; Axel Ockenfels; Steven Stoft
    Abstract: “Instead of outbidding each other and driving prices up, ” on 25 March, the 27 EU nations decided to “pool [their] purchasing power” for the “voluntary common purchase of gas”. In short, they decided to form a buyers’ cartel. So far, difficulties have been identified, but what is needed is a systematic design effort addressing those difficulties. This column proposes a simple, but fairly comprehensive framework for an EU gas-purchasing cartel.
    Date: 2022–05
  18. By: Lynda Sanderson (Productivity Commission); Garrick Wright-McNaughton (FNZ Group); Naomitsu Yashiro (International Monetary Fund)
    Abstract: This paper examines the links between uptake of high-speed internet and entry into exporting among New Zealand firms. The analysis draws on rich, longitudinal information about firms' use of ICT captured in Stats NZ's Business Operations Survey to both identify firms which shifted to UFB and infer differences across firms in their capability to exploit the faster internet connections. It shows that firms that shifted to fibre broadband in the early years of New Zealand's Ultra-Fast Broadband rollout were subsequently more likely than otherwise similar firms to start exporting, and that the strength of this relationship depends upon both the industry in which firms operate and their pre-existing use of the internet for core business activities. To explore the causality lying behind this relationship, the paper makes use of a policy choice to prioritise schools in the rollout of the new fibre broadband infrastructure as an instrument for early uptake. While the results are consistent with a positive effect of UFB uptake on export entry, the instruments are not strong enough to draw firm conclusions on causality.
    Keywords: high-speed internet, UFB, export propensity, digital capability
    JEL: F14 O33 H54
    Date: 2022–12
  19. By: Teodora Boneva; Armin Falk; Mark Fallak; Lasse Stötzer
    Abstract: According to a representative briq survey, two-thirds of the German population would be willing to pay hig- her prices for gas and heating if this were to increase pressure on the Russian government. Four out of five Germans would lower their room temperature to save energy. And more than half of higher-income house- holds would be willing to spend some of their income to help poorer households cope with higher energy prices.
    Date: 2022–04
  20. By: David Spector (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Many collusive agreements involve the exchange of self-reported sales data between competitors, which use them to monitor compliance with a target market share allocation. Such communication may facilitate collusion even if it is unverifiable cheap talk and the underlying information becomes publicly available with a delay. The exchange of sales information may allow firms to implement incentive-compatible market share reallocation mechanisms after unexpected swings, limiting the recourse to price wars. Such communication may allow firms to earn profits that could not be earned in any collusive, symmetric pure-strategy equilibrium without communication.
    Date: 2022–03
  21. By: Alexander Wimmers; Rebekka Bärenbold; Muhammad Maladoh Bah; Rebecca Lordan-Perret; Björn Steigerwald; Christian von Hirschhausen; Hannes Weigt; Ben Wealer
    Date: 2023

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