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on Regulation |
| By: | Bryson, Joanna J. (Hertie School); Malikova, Helena; Garbe, Lisa; Backovsky, David |
| Abstract: | Telecommunications companies (telcos) provide infrastructure essential to the delivery of digital content. The competitiveness of European Union businesses is presently seen as critically dependent on expansion of next-generation communication technologies. Yet, EU telcos are displaying returns on capital that disappoint private investors, leading in some cases to depressed share prices, and potentially making them vulnerable to takeovers bids by financial investors. Given their essential role, the prospect of EU telcos falling into mostly foreign-owned, fiercely profit-maximizing, and/or cost-cutting investors is unappealing for policy makers, at both the national and the European level. One solution suggested by the telcos themselves is that they be allowed to consolidate. Economic theory does not provide a clear answer to how such concentration might affect investment in infrastructure. In this paper, we provide a comparative empirical analysis of the relationship between market concentration and investment in infrastructure in the telco sector. First, we compare investment rates in infrastructure by major telco companies in both the EU and the more concentrated US market. We find more value being returned to customers in the form of infrastructure investment in the less-concentrated EU market. Second, we compare telcos' profitability with that of other corporations involved in the information or ``eye-ball'' value chain. We find operating profits of telcos on both sides of the Atlantic are broadly in line with other companies of the value chain, with the notable exception of the highly concentrated digital ad exchange business. This evidence suggests that lack of incentives rather than lack of ability explains the larger portion of profits invested into infrastructure in the EU compared to the US. Rather than allowing market concentration, which could raise consumer prices and lower infrastructure investment incentives, EU regulators might consider other fund-raising mechanisms, such as redistributing profits from digital ad exchanges. |
| Date: | 2023–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:m42uh&r=reg |
| By: | Domeshek, Maya (Resources for the Future); Burtraw, Dallas (Resources for the Future); Palmer, Karen (Resources for the Future); Roy, Nicholas (Resources for the Future); Shih, Jhih-Shyang (Resources for the Future) |
| Abstract: | The Inflation Reduction Act (IRA) promises to deliver important reductions in CO2 emissions from the electricity sector along with a host of other benefits to citizens and electricity consumers, but it falls short of achieving the 80 percent reduction below 2005 levels by 2030 (80x30) consistent with meeting the nation’s Paris goals. This paper examines the consequences of the IRA and of policies designed to hit the Paris targets for generation mix, consumer costs of electricity, the federal budget, air quality, and human health. Our modeling shows that the IRA substantially reduces the allowance price for necessary an emissions cap to meet the 80x30 goal in the power sector and that doing so yields savings to consumers, particularly those with lower incomes, and additional health benefits beyond those promised from the IRA. |
| Date: | 2023–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-23-42&r=reg |
| By: | Jesper Akesson; Robert W. Hahn; Robert D. Metcalfe; Manuel Monti-Nussbaum |
| Abstract: | Although fake online customer reviews have become prevalent on platforms such as Amazon, Google, and Facebook, little is known about how these reviews influence consumer behavior. This paper provides the first experimental estimates of the effects of fake reviews on individual demand and welfare. We conduct an incentive-compatible online experiment with a nationally representative sample of respondents from the United Kingdom (n = 10, 000). Consumers are asked to choose a product category, browse a platform resembling Amazon, and select one of five equally priced products. One of the products is of inferior quality, one is of superior quality, and three are of average quality. We randomly allocate participants to variants of the platform: five treatment groups see positive fake reviews for an inferior product, and the control group does not see fake reviews. Moreover, some participants are randomly selected to receive an educational intervention that aims to mitigate the potential effects of fake reviews. Our analysis of the experimental data yields four findings. First, fake reviews make consumers more likely to choose lower-quality products. Second, we estimate that welfare losses from such reviews may be important—on the order of $.12 for each dollar spent in the setting we study. Third, we find that fake reviews have heterogeneous effects. For example, the effect of fake reviews is smaller for those who do not trust customer reviews. Fake reviews also have larger effects on those who shop online more frequently. Fourth, we show that the educational intervention reduces the adverse welfare impact of fake reviews by 44%. |
| JEL: | C90 D18 M30 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31836&r=reg |
| By: | Neumann, Karl-Heinz; Strube Martins, Sonia; Schwarz-Schilling, Cara; Eltges, Fabian |
| Abstract: | Diese Studie beleuchtet, wie sich der Aufbau und die Errichtung der gebäudeinternen Glasfaserinfrastruktur unter den mit dem TKG neu geschaffenen rechtlichen Rahmenbedingungen und den sich am Markt etablierenden Geschäftsmodellen der Marktbeteiligten aktuell entwickelt. Neben der Erhebung, Darstellung und Analyse des aktuellen Marktgeschehens beleuchten wir auch, ob es bei den Rahmenbedingungen und im Verhalten der Marktbeteiligten Entwicklungen gibt, die einer zügigen Aufrüstung der gebäudeinternen Infrastruktur im Wege stehen und ob sich die heute bestehende Lücke zwischen den Homes Passed der Glasfasernetze der Betreiber und den Homes Connected der einzelnen Wohnung der Nutzer schließt, damit diese tatsächlich und ohne Zeitverzug einen FTTH-Anschluss nachfragen können. Soweit wir hier Engpässe oder Fehlentwicklungen identifiziert haben, machen wir konkrete Vorschläge für Abhilfemaßnahmen. |
| Abstract: | This study analyses the roll-out of in-building fibre infrastructure in Germany and the current business models of market players established in the market. In addition to the current market developments, we also examine whether there are developments in the framework conditions and in the behaviour of the market players that represent a barrier to the upgrade of the in-building infrastructure and whether the gap that currently exists between the homes passed and the homes connected (up to the dwelling of the end user) with fibre networks is closing so that end users are able to subscribe to an FTTH connection without delay. Where we have identified bottlenecks or undesirable developments, we propose concrete measures |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wikdps:279820&r=reg |
| By: | Burke, Andrew; Fulton, Lewis |
| Keywords: | Engineering, Social and Behavioral Sciences, clean fuel, hydrogen, transportation fuel, synthetic natural gas |
| Date: | 2023–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt00h2k09h&r=reg |
| By: | Antonin Bergeaud; Julia Schmidt; Riccardo Zago |
| Abstract: | When a technology becomes the new standard, the firms that are leaders in producing this technology have a competitive advantage. Matching the semantic content of patents to standards and exploiting the exogenous timing of standardization, we show that firms closer to the new technological frontier increase their market share and sales. In addition, if they operate in a very competitive market, these firms also increase their R&D expenses and investment. Yet, these effects are temporary since standardization creates a common technological basis for everyone, which allows followers to catch up and the economy to grow. |
| Keywords: | standardization, patents, competition, innovation, text mining |
| Date: | 2022–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:cep:poidwp:040&r=reg |
| By: | Martin Gaynor; Adam Sacarny; Raffaella Sadun; Chad Syverson; Shruthi Venkatesh |
| 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: | health care, hospital mergers, US |
| Date: | 2022–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:cep:poidwp:030&r=reg |
| By: | Bottasso, Anna (University of Genoa); Conti, Maurizio (University of Genoa); Ferrara, Antonella Rita (University of Calabria); Robbiano, Simone (University of Eastern Piedmont) |
| Abstract: | The focus of this study is to assess the causal impact of the connection of a local area to a high-speed rail network (HSR) on firms' total factor productivity (TFP). The quasi-random location of the HSR station in the Italian city of Reggio Emilia is exploited in a Difference-in Differences (DiD) research design applied to a large sample of firms, observed over the period 2010-2018. The results suggest that the opening of the HSR station improved treated firms' TFP of about 5%; in particular, such effect is larger for firms closer to the HSR station and slightly increases over the sample period. We also find that the impact of the connection to the HSR station is heterogeneous across industries and depends on firms' size and past productivity. Overall results are robust to a large number of sensitivity checks and falsification tests. |
| Keywords: | transport infrastructure, Difference-in-Differences, total factor productivity |
| JEL: | C50 D24 L92 R30 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16572&r=reg |
| By: | Julien Guyot (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Akhil Rao; Sebastien Rouillon (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Orbital space enables many essential services, such as weather forecasting, global communication, navigation, Earth observation for environmental and agricultural management, and national security applications. Orbit use is increasingly defined by firms launching coordinated fleets—"constellations"—of satellites into low-Earth orbit. These firms operate in markets with few or no competitors, such as the market for broadband internet provision to rural areas. How will oligopolistic competition shape the allocation of orbital space? We analyze orbital-use patterns and economic welfare when two profit-maximizing firms operate satellite constellations with sophisticated collision avoidance systems. We compare this duopoly equilibrium to public utility constellations designed and regulated to maximize economic welfare from orbit use. We show that imperfect competition reduces economic welfare from orbit use by up to 12%—$1.1 billion USD—per year and distorts the allocation of orbital space. The nature of the distortion depends on the magnitude of constellation-related environmental damages. When damages are low, economic welfare is maximized by larger-than-equilibrium constellations. When damages are high, economic welfare is maximized by smaller-than-equilibrium constellations. Between the growing commercial and national interests in outer space and the importance of low-Earth orbit to space exploration, orbit-use management is likely to be a fruitful and policy-relevant area for economic research. We conclude with a discussion of future research directions in orbit-use management relevant to policymakers around the world. |
| Keywords: | Space economics, Satellites, Oligopoly, Common-pool resources, Game theory |
| Date: | 2023–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04255554&r=reg |
| By: | Odolinski, Kristofer (Swedish National Road & Transport Research Institute (VTI)); Nissen, Arne (Trafikverket (The Swedish Transport Administration)); Ait-Ali, Abderrahman (Swedish National Road & Transport Research Institute (VTI)) |
| Abstract: | Switches and crossings are critical assets in railway systems and their maintenance and renewal costs can be substantial. This paper evaluates the economic impact of cumulative loads on such assets and the effect of different contract designs for railway maintenance. Results from survival analyses are combined with a life cycle costing model to analyse costs for maintenance, train delays, and renewals. The findings provide insights into improving the timing of asset renewal as well as the impact of different reimbursement rules in the design of maintenance contracts. The estimated optimal lifetimes of different types of switches and crossings are similar to their technical lifetimes, yet there a couple of exceptions. The estimated effects of the reimbursement rule provide unique results on the risk premiums allowed in order to achieve a break-even between different maintenance contract designs. |
| Keywords: | Switches and crossings; Maintenance; Renewal; Lifecycle costs; Contract design; Reimbursement rule |
| JEL: | H57 R42 |
| Date: | 2023–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vtiwps:2023_011&r=reg |
| By: | Matthew Sprintson; Edward Oughton |
| Abstract: | More than one-fifth of the US population does not subscribe to a fixed broadband service despite being a recognized merit good. For example, less than 4% of citizens earning more than US \$70k annually do not have broadband, compared to 26% of those earning below US \$20k annually. To address this, the Biden Administration has undertaken one of the largest broadband investment programs ever via The Bipartisan Infrastructure Law, with the aim of addressing this disparity and expanding broadband connectivity to all citizens. Proponents state this will reduce the US digital divide once-and-for-all. However, detractors say the program leads to unprecedented borrowing at a late stage of the economic cycle, leaving little fiscal headroom. Subsequently, in this paper, we examine broadband availability, adoption, and need and then construct an input-output model to explore the macroeconomic impacts of broadband spending in Gross Domestic Product (GDP) terms. Finally, we quantify inter-sectoral macroeconomic supply chain linkages from this investment. The results indicate that federal broadband investment of US \$42 billion has the potential to increase GDP by up to US \$216 billion, equating to 0.2% of annual US GDP over the next five years, with an estimated Keynesian investment multiplier of 2.89. To our knowledge, we contribute the first economic impact assessment of the US Bipartisan Infrastructure Law to the literature. |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2311.02431&r=reg |
| By: | Suckow, Silvio; George, Sarah |
| Abstract: | Das Neun-Euro-Ticket war eines der größten Verkehrsexperimente der letzten Jahrzehnte. Was hat dieses Experiment bewirkt? Um dies zu beantworten, wurde die vierte Panel-Welle von repräsentativen Befragungsdaten ausgewertet, die im Rahmen des Projekts MOBICOR ("Mobilität in Zeiten der Corona-Pandemie") am WZB erhoben wurden und mit den Ergebnissen anderer Studien zum Neun-Euro-Ticket verglichen. Der Überblick zeigt, dass einkommensschwachen Menschen die Teilhabe an Mobilität ermöglicht wurde, was ihre Lebenszufriedenheit steigerte. Der ärmste Teil der Bevölkerung konnte in den Sommermonaten insbesondere Freizeitfahrten unternehmen, die ihnen sonst nicht möglich gewesen wären. Für die sehr hohen Einkommensgruppen zeigten sich Mitnahmeeffekte, denn sie nutzten das Ticket häufiger und für längere Fahrten als Ärmere. Besonders die urbane Bevölkerung konnte vom Neun-Euro-Ticket Gebrauch machen. In zentralen städtischen Lagen kauften durchschnittlich 63 Prozent der Bevölkerung das Ticket, im Umland 27 Prozent und im dörflichen Raum nur 3 Prozent. Die Zahlen legen nahe, dass von dem günstigen Preis besonders diejenigen profitierten, die in Wohnlagen mit stark ausgebauter Infrastruktur leben. Doch nicht nur die Landbevölkerung war im Nachteil. Engpässe durch überfüllte Züge und Bahnhöfe - gerade im Regionalverkehr - stellten vor allem für behinderte Menschen eine Zumutung dar. Teilweise konnte diese Personengruppe öffentliche Verkehrsmittel nicht mehr nutzen. Um von den in Umfragen mehrheitlich geäußerten Vorteile des Neun-Euro-Tickets - Einfachheit und Flexibilität der Nutzung - zu profitieren, schlagen wir den Ausbau des Deutschlandtickets zu einem dreistufigen und damit preissensitiven Flatratemodell vor. Neben Infrastrukturinvestitionen hilft die Integration von Angeboten der "letzten Meile" in die Flaterates Ungleichheiten abzumildern. Hierfür ist die konsequente Weiterentwicklung der Verkehrsverbünde von Ticketanbietern zu intermodalen Mobilitätsplattformen entscheidend. |
| Abstract: | The Nine-Euro-Ticket was one of the biggest transportation experiments in recent times. What did this experiment achieve? In order to answer this, the fourth panel wave of representative survey data, collected as part of the MOBICOR ("Mobility in Times of the Corona Pandemic") project at the WZB, was analyzed and compared with the results of other studies on the topic. The overview shows that the discounted cost enabled lowincome households to increase their everyday trips, which in turn increased their life satisfaction. Specifically, those in the lowest income portion of the population were able to take leisure trips that would otherwise have been financially unattainable for them. Households with very high income had deadweight effects, as they used the ticket more often and for longer journeys than those with low income. The urban population was particularly able to make use of the Nine-Euro-Ticket. In central urban locations an average of 63 percent of the population bought the ticket. Compare this figure to surrounding areas where 27 percent of the population bought it and rural areas where only 3 percent made the purchase. These figures suggest that those living in residential areas with robustly developed infrastructure benefited most from the low price, potentially at a negative cost to others. Bottlenecks, caused by overcrowded trains and stations, are one example of said negative cost. These bottlenecks were especially pronounced in regional transport and were a marked burden for people with disabilities. In some cases, they even resulted in the complete exclusion of disabled people from public transportation. Despite these negative effects, surveys showed that a majority of respondents saw many advantages to the discounted ticket, like it's simplicity and flexibility of use. In order to make use of the advantages of the Nine-Euro-Ticket, we propose the expansion of the Deutschlandticket to a three-tier and thus price-sensitive flat rate model. In addition to infrastructure investments, the integration of "last mile" offers into the flat rates can also help to mitigate inequalities. The consistent further development of the "Verkehrsverbünde" from ticket providers to intermodal mobility platforms is crucial for this. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbdms:279780&r=reg |
| By: | Tommaso Bondi (Cornell Tech, 2 West Loop Road, 10044 New York, NY); Omid Rafieian (Cornell Tech, 2 West Loop Road, 10044 New York, NY) |
| Abstract: | Advances in behavioral targeting allow news publishers to monetize based on advertising. However, behavioral targeting requires consumer tracking, which has heightened privacy concerns among consumers and regulators. In this paper, we examine how stricter privacy regulations that ban consumer tracking affect news publishers' content strategies. We develop a theoretical framework that captures a change in privacy policies as a shift in publishers' inference about consumer types. We consider a model where news publishers choose the content and advertising, and ideologically heterogeneous consumers select their preferred content based on their ideology and idiosyncratic shocks. We compare two salient informational environments: (1) behavioral targeting, where perfect inference about consumers is allowed, and (2) contextual targeting, where consumer tracking is banned due to privacy regulations, and publishers can only infer consumer types based on their content choice. We show that privacy regulations that ban behavioral targeting incentivize publishers to shift towards more extreme and polarizing content in both monopoly and duopoly settings, even though the shift to more extreme content can hurt both demand and consumer welfare. In summary, our research uncovers a previously unexplored relationship between privacy and polarization, shedding light on the potential unintended consequences of privacy regulations in media markets. |
| Keywords: | advertising, targeting, privacy, polarization |
| JEL: | M37 L82 L13 D83 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2309&r=reg |
| By: | Hokkanen, Topi |
| Abstract: | This paper discusses the externalities and market failures in cryptocurrency markets. In particular, I highlight the significant environmental externalities created by Proof-of-Work (PoW) cryptocurrencies, the most prominent of which is Bitcoin. The main goals of this paper are to quantify these externalities, illustrate the mechanisms by which they arise, and finally discuss feasible mechanisms to regulate them. Latest estimates show that Bitcoin mining consumes roughly the same amount of electricity as Argentina or Sweden, with commensurate carbon dioxide emissions. The two main factors driving these externalities are Bitcoin's electricity-intensive consensus protocol and Bitcoin prices, which directly influence mining incentives. Efficient supply-side regulation of these externalities is hamstrung by the internationally mobile nature of Bitcoin miners, creating a risk of carbon leakage and regulatory arbitrage in the absence of a global carbon tax. Moreover, the cryptocurrency market and exchanges themselves are to a high degree unregulated and opaque. This exacerbates the situation since cryptocurrency prices are directly linked to mining incentives. Instead of regulating the miners i.e. the supply side of the market, as the literature has broadly suggested, I recommend focusing on regulating the demand side, the exchanges and marketplaces, as a reasonable first step in the comprehensive regulation of cryptocurrencies. Cross-border coordination is likely to be a crucial aspect in mitigating the environmental externalities of cryptocurrencies. |
| Keywords: | forecasting, investment, Tobin's Q, discrete wavelets, bitcoin, cryptocurrency, externalities, crypto mining |
| JEL: | D62 E42 H23 Q54 Q58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bofecr:279702&r=reg |