nep-reg New Economics Papers
on Regulation
Issue of 2023‒08‒14
ten papers chosen by
Christopher Decker
Oxford University

  1. The Digital Markets Act and the Whack-A-Mole Challenge By Jens-Uwe Franck; Martin Peitz
  2. The (Ir)Relevance of the Cooperative Form By Tirole, Jean; Moisson, Paul-Henri; Dubois, Pierre
  3. Making Automated Vehicles Work for Better Transport Services: Regulating for Impact By ITF
  4. Economic Impact of Significant New Deployment of Infrastructure : Historical examples and links to potential high impact outcomes for 5G By Cave, Jonathan; Waterson, Michael; Battisti, Giuliana
  5. Dynamic Net Metering for Energy Communities By Ahmed S. Alahmed; Lang Tong
  6. Pricing with bargain hunting consumers By Gentry, Matthew; Pesendorfer, Martin
  7. Competition in generative artificial intelligence foundation models By Christophe Carugati
  8. Uncertainty and Market Power: An Empirical Investigation By Kazakis, Pantelis
  9. The Changing Economics of China’s Electricity System: Why Renewables and Electricity Storage may be a Lower Cost Way to Meet Demand Growth than Coal By Kahrl , Fritz; Lin, Jiang
  10. Wettbewerb und Nachhaltigkeit in Deutschland und der EU: Ökonomische Einschätzung der Studie im Auftrag des Bundesministeriums für Wirtschaft und Klimaschutz By Budzinski, Oliver; Stöhr, Annika

  1. By: Jens-Uwe Franck; Martin Peitz
    Abstract: The article addresses the implementation of the Digital Market Act’s rules on ‘anticircumvention’. We present an effects-based approach and propose a three-step procedure to identify whether a certain practice should be conceptualized as circumventing an obligation. We apply this approach to several practices suspected of circumventing the ban on parity clauses and analyse how our results fit into the Digital Market Act’s concept and instruments for avoiding circumvention. Moreover, we elaborate on the role that the anticircumvention rules may play in safeguarding the effectiveness of the restrictions on bundling and self-preferencing in ranking, thus illustrating how they may operate to future-proof the Digital Markets Act but also where their limitations lie.
    Keywords: Digital Markets Act, anti-circumvention, antitrust law, price parity clauses, bundling, self-preferencing
    JEL: K21
    Date: 2023–07
  2. By: Tirole, Jean; Moisson, Paul-Henri; Dubois, Pierre
    Abstract: It is puzzling that cooperatives, which stand for the interests of their users, do not occupy more space in the market for corporate forms. This paper unveils a new impediment to their formation. It shows that equilibrium free-riding handicaps cooperatives in their competition with alternative institutions, notably the for-profits. The irrelevance of cooperatives is a remarkably robust result. The paper then analyzes desirable government interventions in the corporate market.
    Keywords: Cooperatives; free-riding; competing corporate forms
    JEL: D23 D71 D8 L22
    Date: 2023–07–03
  3. By: ITF
    Abstract: This report explores how mobility services using automated vehicles might change the transport landscape. How can automated transport services help enable positive outcomes for societies? How will they ensure passenger safety? What rules should apply to such new services that overlap with other, heavily regulated services like taxis and public transport? The report assesses where regulation should adapt and outlines principles for forward-looking regulation. It offers pragmatic recommendations to bring in better transport for citizens.
    Date: 2023–06–26
  4. By: Cave, Jonathan (University of Warwick); Waterson, Michael (University of Warwick); Battisti, Giuliana (University of Warwick)
    Abstract: This paper aims to examine quantitatively and qualitatively the impact of five key general purpose technologies in order to gain insights into what factors may arise in relation to 5G as a potential example. We first attempt a definition of what constitutes a general-purpose technology, providing a potential framework for analysis of impact mechanisms then take this to the five case studies. It is difficult to capture the impacts of such technologies because their scope is broad and commonly a suitable base case from which to measure impact is missing. In addition, there are in each case antecedents and complementary developments which influence their impact. However, our analysis points to a range of factors that must be considered in relation to potential new candidate technologies, including a range of potential governmental interventions.
    Date: 2023
  5. By: Ahmed S. Alahmed; Lang Tong
    Abstract: We propose a social welfare maximizing market mechanism for an energy community that aggregates individual and community-shared energy resources under a general net energy metering (NEM) policy. Referred to as Dynamic NEM (D-NEM), the proposed mechanism dynamically sets the community NEM price based on aggregated community resources. D-NEM guarantees a higher benefit to each community member than possible outside the community, and no sub-communities would be better off departing from its parent community. D-NEM aligns each member's incentive with that of the community such that each member maximizing individual surplus under D-NEM results in maximum community social welfare. Empirical studies compare the proposed mechanism with existing benchmarks, demonstrating its member and community-level welfare benefits.
    Date: 2023–06
  6. By: Gentry, Matthew; Pesendorfer, Martin
    Abstract: A single-product retailer faces bargain hunting consumers whose willingness to pay incorporates sensations of gain and loss driven by differences between the observed price and prices they rationally expect in the spirit of Koszegi and Rabin (2006). We examine the Bayesian Nash equilibrium (non-commitment) pricing solution in which (i) the retailer maximizes profit given consumers' beliefs and (ii) consumers' beliefs are consistent with the retailer's choice. We show two novel results: First, a pure-strategy, uniform-price, equilibrium does not exist when consumers are bargain hunters who value gains more than losses. Second, in this case there exists a mixed strategy equilibrium and all mixed strategy equilibria involve the same retailer profit. The equilibrium retailer profit is (weakly) lower than in the absence of reference effects.
    Keywords: bargain hunting; pricing; reference effects
    JEL: J1
    Date: 2021–09–01
  7. By: Christophe Carugati
    Abstract: This working paper examines how competition in foundation models (FMs) works.
    Date: 2023–07
  8. By: Kazakis, Pantelis
    Abstract: Recent academic research documents a sharp increase in global market power. Using newly created and more precise data on aggregate market power (see De Loecker and Eeckhout, 2021), we add to the literature on the determinants of market power by investigating whether and how uncertainty may have played a role in its increase. Using a global sample of the world’s major economies, we find that uncertainty is associated with more market power. In addition, we find that higher levels of democracy and a better functioning political system, are negatively associated with market power.
    Keywords: uncertainty; economic fluctuations; market power; market share; barriers to entry
    JEL: D80 L10 L11
    Date: 2023–05–30
  9. By: Kahrl , Fritz; Lin, Jiang
    Abstract: Concerns around reliability in China’s electricity sector have rekindled interest in a traditional solution: building more coal-fired generation. However, over the past decade China’s electricity sector has seen significant changes in supply costs, demand patterns, and regulation and markets over the past decade, with falling costs for renewable and storage generation, “peakier” demand, and the creation of initial wholesale markets. These changes suggest that traditional approaches to evaluating the economics of different supply options may be outdated. This paper illustrates how a net capacity cost metric – fixed costs minus net market revenues – might be better suited to evaluating supply options in China. Using a simplified example with recent resource cost data, the paper illustrates how, with a net capacity cost metric, solar PV and electricity storage may be a more cost-effective option for meeting demand growth than coal-fired generation.
    Keywords: Social and Behavioral Sciences, peak demand, economics of electricity generation, China, coal power
    Date: 2023–07–01
  10. By: Budzinski, Oliver; Stöhr, Annika
    Abstract: Dem Aufruf des Bundesministeriums für Wirtschaft und Klimaschutz (BMWK) folgend, nehmen wir in dieser Stellungnahme eine ökonomische Einschätzung des umfangreichen Gutachtens zu 'Wettbewerb und Nachhaltigkeit in Deutschland und der EU', welches im Auftrag des BMWK angefertigt wurde, vor. Wir legen dabei den Fokus auf 12 vom Ministerium hervorgehobene Maßnahmenvorschläge. Insgesamt zeigt sich, dass Ausnahmen vom Wettbewerbsschutz wirtschaftliche Macht schaffen und entsprechende Ausnahmen vom Wettbewerbsschutz regelmäßig dem Gemeinwohl der Gesellschaft schaden, ohne dass Nachhaltigkeitsziele damit besser erreicht werden. Wir plädieren daher für die Einbeziehung von Nachhaltigkeitsaspekten in wettbewerbspolitische Fallanalysen und -entscheidungen unter der Voraussetzung, dass der Wettbewerbsprozess dadurch insgesamt gestärkt wird.
    Keywords: Wettbewerb und Nachhaltigkeit, Sustainable Development Goals, Wettbewerbspolitik, Green Antitrust
    JEL: K21 K32 P18 Q58
    Date: 2023

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