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on Regulation |
| By: | Bernhard Ganglmair; Julia Krämer; Jacopo Gambato |
| Abstract: | The EU General Data Protection Regulation (GDPR) of 2018 introduced stringent transparency rules compelling firms to disclose, in accessible language, details of their data collection, processing, and use. The specifics of the disclosure requirement are objective, and its compliance is easily verifiable; readability, however, is subjective and difficult to enforce. We use a simple inspection model to show how this asymmetric enforceability of regulatory rules and the corresponding firm compliance are linked. We then examine this link empirically using a large sample of privacy policies from German firms. We use text-as-data techniques to construct measures of disclosure and readability and show that firms increased the disclosure volume, but the readability of their privacy policies did not improve. Larger firms in concentrated industries demonstrated a stronger response in readability compliance, potentially due to heightened regulatory scrutiny. Moreover, data protection authorities with larger budgets induce better readability compliance without effects on disclosure. |
| Keywords: | data protection, disclosure, GDPR, privacy policies, readability, regulation, text-as-data, topic models |
| JEL: | C81 D23 K12 K20 L51 M15 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_547&r= |
| By: | Fernando García Martínez (Banco de España); Matías Pacce (Banco de España) |
| Abstract: | The increase in electricity prices, which peaked in August 2022, has affected the various activities carried out in the Spanish electricity sector differently. This paper analyses the impact of this increase on the sector, distinguishing between electric power companies and electricity retailers, paying special attention to their operating profit and, particularly, to the influence of aspects such as (i) the incidence of forward contracts with a fixed price, (ii) asymmetric exposure to price increases in wholesale electricity markets, or (iii) belonging to vertically integrated groups, in the case of electricity retailers. The effect on the sector of the measures rolled out by the authorities to mitigate the impact of higher electricity costs on households and companies in Spain is also analysed. Of note among these measures are the Iberian Exception (a mechanism to cap the cost of the gas used in electricity generation) and the temporary deduction of the so-called excess remuneration arising from higher gas prices. Lastly, this paper studies the impact of the extraordinary temporary levy that energy companies must pay on net turnover for 2022 and 2023. |
| Keywords: | energy, electricity markets, electricity prices, generation costs |
| JEL: | E31 Q41 Q43 L94 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:2316e&r= |
| By: | Patrice Bougette (Université Côte d'Azur, CNRS, GREDEG, France); Oliver Budzinski (Technische Universität Ilmenau); Frédéric Marty (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | This paper explores the evolving landscape of competition law enforcement, focusing on the dynamic interplay between ex-ante and ex-post approaches. Amidst the digital transformation and regulatory shifts, traditional enforcement mechanisms are being re-evaluated. This study aims to dissect the economic rationale behind these shifts, proposing a hybrid framework that balances legal certainty with the flexibility needed to address contemporary market challenges. |
| Keywords: | Competition Law Enforcement, Ex-ante and Ex-post Approaches, Anticompetitive Practices, Merger Control, Digital Economy |
| JEL: | K21 L40 L86 D47 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-18&r= |
| By: | Budzinski, Oliver |
| Abstract: | Der vorliegende Beitrag wendet die dynamische Wettbewerbstheorie von Wolfgang Kerber und anderen auf aktuelle Fragen der Wettbewerbspolitik an. Damit zeigt der Beitrag, dass dynamische Wettbewerbstheorien sehr wohl zu konkreten wettbewerbspolitischen Empfehlungen führen und einen wichtigen Beitrag zum wettbewerbspolitischen Diskurs leisten können. Zu den aufgegriffenen wettbewerbspolitischen Themen gehören der As-Efficient-Competitor-Test in der Missbrauchskontrolle, die Kontrolle und Regulierung systemischer Marktmacht in digitalen Ökosystemen, anlassunabhängige Wettbewerbspolitik und sanktionsbewehrte Sektoruntersuchungen, sowie die Fusionskontrolle nicht-horizontaler Zusammenschlüsse. |
| Abstract: | This paper applies dynamic competition theory to current topics and controversies in competition policy. In doing so, it showcases how dynamic competition theory allows for specific competition policy recommendations and can contribute to the antitrust discourse. The current competition and antitrust policy topics that are addressed include the as-efficient-competitor-test in abuse control, the regulation of systemic market power in digital ecosystems, antitrust interventions based on proactive sector/industry investigations as well es merger control in relation to non-horizontal mergers and acquisitions. |
| Keywords: | dynamischer Wettbewerb, Wettbewerbspolitik, Antitrust, Innovationen, Kartellpolitik, Fusionskontrolle, Missbrauchsaufsicht, Marktmacht, evolutorischer Wettbewerb, Marktprozesstheorie, dynamic competition, competition policy, antitrust, innovation, cartel policy, merger control, abuse of dominance, market power, evolutionary competition, market process theory |
| JEL: | L40 L13 B52 K21 M21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:tuiedp:297973&r= |
| By: | Ziyu Yan |
| Abstract: | This thesis investigates the dynamics of multimarket contact and airline mergers on collusive pricing of airlines. In align with Bernheim and Whinston (1990) and Athey et.al.(2004), it detects collusive pricing via pairwise price difference and price rigidity. The piece of work extends previous work by incorporating additional controls such as distinction between non-stop and stopover itineraries and detailed market concentration measures. The findings confirm a significant relationship between multimarket contact and reduced price differences, indicating collusive equilibria facilitated by frequent interactions across markets. Moreover, the results highlight that airlines exhibit more collusive behavior when pricing non-stop flights, and are more likely to attain tacit collusion when they approaches duopoly in a particular market. The study also explores the effects of airline mergers on collusion, employing an event study methodology with a difference-in-difference (DID) design. It finds no direct evidence that mergers lead to increased collusion among unmerged carriers. However, it reveals that during and after the merger process, carrier pairs between merged and unmerged carriers are more likely to collude compared to pairs of unmerged carriers. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.15825&r= |
| By: | Martin Peitz; Anton Sobolev |
| Abstract: | We consider a monopolist selling an experience good to differentially informed consumers: some consumers are uncertain about their tastes, whereas other consumers are perfectly informed. The fully informed monopolist sets a uniform price and can make personalized product recommendations. We characterize conditions under which the monopolist biases its recommendations – that is, some consumers with match values lower than the marginal cost follow the recommendation to buy the product or some consumers with match values higher than the marginal cost follow the recommendation not to buy the product. |
| Keywords: | information design, biased recommendations, recommender system |
| JEL: | L12 L15 D21 D42 M37 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_554&r= |
| By: | Clemens Stiewe; Alice Lixuan Xu; Anselm Eicke; Lion Hirth |
| Abstract: | The average revenue, or market value, of wind and solar energy tends to fall with increasing market shares, as is now evident across European electricity markets. At the same time, these markets have become more interconnected. In this paper, we empirically study the multiple cross-border effects on the value of renewable energy: on one hand, interconnection is a flexibility resource that allows to export energy when it is locally abundant, benefitting renewables. On the other hand, wind and solar radiation are correlated across space, so neighboring supply adds to the local one to depress domestic prices. We estimate both effects, using spatial panel regression on electricity market data from 2015 to 2023 from 30 European bidding zones. We find that domestic wind and solar value is not only depressed by domestic, but also by neighboring renewables expansion. The better interconnected a market is, the smaller the effect of domestic but the larger the effect of neighboring renewables. While wind value is stabilized by interconnection, solar value is not. If wind market share increases both at home and in neighboring markets by one percentage point, the value factor of wind energy is reduced by just above 1 percentage points. For solar, this number is almost 4 percentage points. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.17166&r= |
| By: | Martin Spann; Marco Bertini; Oded Koenigsberg; Robert Zeithammer; Diego Aparicio; Yuxin Chen; Fabrizio Fantini; Ginger Zhe Jin; Vicki Morwitz; Peter Popkowski Leszczyc; Maria Ana Vitorino; Gizem Yalcin Williams; Hyesung Yoo |
| Abstract: | Over the past decade, an increasing number of firms have delegated pricing decisions to algorithms in consumer markets such as travel, entertainment, and retail; business markets such as digital advertising; and platform markets such as ride-sharing. This trend, driven primarily by the increased availability of digital data and developments in information technology, has economic and social consequences that are not yet well understood. The aim of this paper is therefore to examine various implications and challenges of algorithmic pricing for consumers, managers, and regulators. We contribute to the literature by defining and classifying algorithmic pricing, understanding managers' perceptions and adding empirical evidence on its use, raising important considerations for the three stakeholders, and finally outlining research priorities in this area. |
| JEL: | D4 L1 L4 L5 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32540&r= |
| By: | In Kyung Kim (Department of Economics, Sogang University, Seoul, Korea); Kyoo il Kim (Department of Economics, Michigan State University) |
| Abstract: | This study investigates the pricing behaviors of instant noodle manufacturers in South Korea during the 2010s. We find strong evidence against the suspicion by the Korea Fair Trade Commission (KFTC) that firms in this industry have colluded in price-fixing. Contrary to these suspicions, it appears they have been subjected to de facto price controls by the government; the observed markups are significantly lower than those calculated under a scenario of Nash–Bertrand competition, setting aside any collusion. Our counterfactual analysis suggests that profits would have been much higher (by 50 percent on average) than observed if the firms had engaged in the ‘follow-the-leader’ pricing strategy as claimed by the regulatory authority. These findings align with the ruling of the Supreme Court of Korea in 2015, which overturned the KFTC’s imposition of fines (approximately 120 million US dollars) on the four major instant noodle producers in 2012. |
| Keywords: | Follow-the-leader pricing, Discrete choice demand, Collusion, Instant noodles |
| JEL: | D12 D22 L40 L66 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:sgo:wpaper:2403&r= |
| By: | Crescioli, Tommaso |
| Abstract: | There is a consensus over Europe’s transformation into a highly competitive economy through a series of ambitious pro-competition reforms. However, both the European Commission and national actors have legislative authority over competition policies. Thus, who are the critical actors behind this legislative and economic transformation in this multi-level system? Focusing on the liberalization of state-owned industries and using a staggered difference-in-differences approach, the paper shows that the effectiveness of European directives in decreasing firm-level market power increased with the extent of preceding domestic pro-competition reforms. For every unit increase of the early domestic reform index, EU directives decrease market power in liberalized industries by an additional 7.8%. However, this effect is not significant in countries that did not reform their industries ex-ante. This finding contradicts the established view in the literature identifying the Commission as the dominant force driving this transformation, which implemented ambitious reforms by often overcoming the resistance of reluctant national governments. Instead, it is shown that the effectiveness of the Commission’s reforms depends on the support of domestic actors and compatible national institutions. |
| Keywords: | political economy; market power; competition policy; liberalization; single market; Elsevier deal |
| JEL: | D41 D42 D43 E60 L10 |
| Date: | 2024–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123605&r= |
| By: | Mattauch, Linus; Hepburn, Cameron; Spuler, Fiona; Stern, Nicholas |
| Abstract: | Avoiding unmanageable climate change implies that global greenhouse gas emissions must be reduced rapidly. Carbon prices and technological development are essential to deliver such reductions. Changes in preferences, however, are rarely considered, even though other major socioeconomic transitions – such as those from reducing smoking and drink-driving – have succeeded partly because preferences have changed. This article examines the impact of climate policy-induced changes in consumers’ preferences. We show that low-carbon policies could be better designed if it is recognised that preferences can be endogenous to such policies. For instance, carbon taxes must be adjusted, if they crowd-in or -out social preferences, to achieve a given target. Further, when the urban built environment changes mobility preferences, the value of low-carbon infrastructure investments can be underestimated if such effects are ignored. Third, policy-induced changes in preferences for active travel and plant-based diets could increase the net benefits of the transition to zero emissions. |
| Keywords: | carbon pricing; climate change; crowding-in; endogenous preferences; health co-benefits; transport infrastructure; ESRC Centre for Climate Change Economics and Policy (ref. ES/R009708/1) and the Grantham Foundation for the Protection of the Environment; ES/R009708/1; European Union's Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No. 681228. |
| JEL: | A12 D91 H23 Q54 Q58 |
| Date: | 2022–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:115389&r= |