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on Regulation |
| By: | Mehdi Guelmamen (University of Lorraine, University of Strasbourg, AgroParisTech, CNRS, INRAE, BETA.) |
| Abstract: | The provision of drinking water has become a central concern for public authorities due to climate change, prompting policymakers to reevaluate their approach to this semi-renewable resource. In this paper, we assess the effect of inter-municipal cooperation on performance. Using a comprehensive panel dataset comprising all French drinking water providers from 2008 to 2021, we show that organizational forms chosen by municipalities have an effect on prices of drinking water paid by consumers. More precisely, our empirical findings reveal a selection bias in the estimation of price equations and we show that consumer prices are significantly higher on average when municipalities decide to cooperate. Inter-municipal cooperation does not necessarily lead to better performance in the provision of drinking water. |
| Keywords: | intermunicipal cooperation, local government, public services, drinking water prices, selection bias |
| JEL: | H11 H77 L11 L95 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:afd:wpaper:2410 |
| By: | Fiona M. Scott Morton |
| Abstract: | This Policy Brief explores the potential implementation of Article 7 interoperability for social networking core platform systems. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bre:polbrf:node_10544 |
| By: | Patrice Bougette (Université Côte d'Azur, CNRS, GREDEG, France); Oliver Budzinski (Ilmenau University of Technology, Germany); 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. In particular, the analysis highlights the emergence of new competition policy approaches that combine regulatory-type interventions with strengthened enforcement strategies. |
| Keywords: | Competition Law Enforcement, Ex-ante and Ex-post Approaches, Anticompetitive Practices, Merger Control, Digital Economy |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:afd:wpaper:2407 |
| By: | Holmberg, Pär (Research Institute of Industrial Economics (IFN)) |
| Abstract: | The power exchange and the real-time markets used by the system operator differ in how system constraints are managed. This can result in regulatory arbitrage, which can increase consumer costs, increase the risk of power outages and distort investment incentives. This paper uses a game-theoretical approach to study these problems and proposes various measures to reduce them. For example, zones and grid tariffs can be adjusted. Moreover, regulations of real-time markets can improve, and transmission system operators can implement measures to increase the capacity of the existing grid. |
| Keywords: | Congestion management; Zonal pricing; Countertrading; Redispatch; Real-time market; Regulatory arbitrage; Inc-dec game |
| JEL: | C72 D47 L94 |
| Date: | 2024–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1512 |
| By: | Javier Asensio (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB) & Institut d'Economia de Barcelona (IEB).); Anna Matas (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB) & Institut d'Economia de Barcelona (IEB).) |
| Abstract: | Spain operates a ‘competition for the market’ system to award the regulated monopoly rights to run intercity bus services across its different regions. Such tendering system has undergone different changes since 2007. We assess the impact of those changes on different outcomes of the auctions, such as participation, submitted prices and frequencies, as well as on outcomes of the whole process in terms of prices and frequencies offered to final consumers. The results show that the design of the terms of tender can significantly modify the conditions under which bus services are operated. The weight given to price bids in the score function is shown to be a relevant variable to increase competition for the market. |
| Keywords: | Tendering, Intercity bus, Coach, Score function auctions, Spain. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2406 |
| By: | Markkanen, Jaakko |
| Abstract: | Abstract I study the transmission of pharmacy mark-ups to retail prices and the policy between retail markups and Value Added Tax (VAT) rates in Finland. My reduced form evidence demonstrates that pharmaceutical manufacturers respond to a decrease in the regulated pharmacy mark-ups by increasing their wholesale prices. I estimate a structural model of pharmaceutical supply and demand using data from the Finnish statin market. I show that only half of the decrease in the pharmacy-markup was transferred to retail prices. I also demonstrate that the government can address the increase in manufacturer revenues by increasing the VAT rate for pharmaceuticals. |
| Keywords: | Pharmaceuticals, Passthrough, Price regulation |
| JEL: | I11 H51 L51 C23 |
| Date: | 2024–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:123 |
| By: | Rüdiger Fahlenbrach (École Polytechnique Fédérale de Lausanne (EPFL); Swiss Finance Institute; European Corporate Governance Institute (ECGI)); Minsu Ko (Monash University); René M. Stulz (Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)) |
| Abstract: | Bank payout policy is strongly affected by regulation and politics, especially for the largest banks. Banks, but not industrial firms, have consistently lower payouts in times of high regulation uncertainty and under democratic presidents. After the Global Financial Crisis, bank regulators' influence on payout policies of the largest banks increases sharply and repurchases become more important than dividends for these banks. Repurchases respond more to regulatory climate changes than dividends. The stock-price reaction of the largest banks to the election of Donald Trump is larger than for small banks or industrial firms, and their repurchases increase sharply afterwards. |
| Keywords: | Financial institutions, payout policy, dividends, repurchases, regulation, political influence |
| JEL: | G21 G28 G35 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2486 |
| By: | Wesley Blundell; Juan Sebastián Vélez-Velásquez |
| Abstract: | The impact of carbon taxes on consumer welfare and emissions in the transportation sector is influenced by both regulatory and market dynamics. As the sources of climate emissions from transportation evolve, how will this impact change in the future? Utilizing extensive data from retail fuel stations and wholesalers in Colombia, we estimate the factors affecting the pass-through of a carbon tax on gasoline prices. Our findings reveal that the pass-through to Colombian consumers is significant, often exceeding one. This phenomenon of "overshifting" vanishes when markets are regulated or when gas stations are vertically integrated with wholesalers. These results indicate that as the global use of carbon taxes to address climate externalities from automobile use increases, the welfare loss for consumers may be greater than what current literature, often focused on the United States, suggests. **** RESUMEN: El impacto de los impuestos al carbono sobre el bienestar de los consumidores y las emisiones en el sector del transporte está influenciado tanto por la dinámica regulatoria como por la del mercado. A medida que evolucionan las fuentes de emisiones climáticas del transporte, ¿cómo cambiará este impacto en el futuro? Utilizando datos para un amplio número de estaciones de servicio minoristas y mayoristas en Colombia, estimamos los factores que afectan la transferencia de un impuesto al carbono a los precios de la gasolina. Nuestros hallazgos revelan que la transferencia a los consumidores colombianos es significativa, a menudo superior a uno. Este fenómeno de "sobretransferencia" desaparece cuando los mercados están regulados o cuando las estaciones de servicio están integradas verticalmente con los mayoristas. Estos resultados indican que a medida que aumenta el uso global de los impuestos al carbono para abordar las externalidades climáticas del uso del automóvil, la pérdida de bienestar para los consumidores puede ser mayor que lo que sugiere la literatura actual, a menudo centrada en los Estados Unidos. |
| Keywords: | carbon tax, transportation, tax incidence, overshifting, gasoline, Impuesto al carbono, transporte, incidencia de impuestos, sobretransferencia, gas |
| JEL: | L91 L98 Q54 H23 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bdr:borrec:1292 |
| By: | Lind, Joar (Swedish National Road and Transport Research Institute (VTI)) |
| Abstract: | The Swedish container port markets are analysed using the concept of captive and contestable hinterland and foreland. Using a freight transport planning tool, the Swedish national freight transport model Samgods, we identify the geographical markets of Swedish container ports and their market shares for the municipalities of Sweden. Results from the proposed method indicate that within the market segment, about half of municipalities in Sweden are captive, about a third is tied to the market-leading port. In the future, the market segment tends to be more captive, and the market-leading port will strengthen its position. |
| Keywords: | Port competition; Freight transport modelling; Hinterland; Port choice; Captive or contestable areas |
| JEL: | R41 R42 |
| Date: | 2024–11–29 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:vtiwps:2024_006 |
| By: | Herbert Dawid (Bielefeld University, Germany); Philipp Harting (Université Côte d'Azur, CNRS, GREDEG, France; Bielefeld University, Germany); Michal Neugart (Technical University of Darmstadt, Germany) |
| Abstract: | Artificial intelligence algorithms are increasingly used for online pricing and are seen as a major threat to competitive markets. We show that if firms use a deep Q-network (DQN) as an example of a state-of-the-art machine learning algorithm, prices are supra-competitive in duopoly but quickly move to competitive prices as the number of competitors in an oligopoly increases. This finding is very robust concerning variations of the exploration and learning rate used in the DQN algorithm. |
| Keywords: | algorithmic price setting, deep Q-network, oligopoly, supracompetitive prices |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-32 |
| By: | Fuente, David (School of the Earth, Ocean and Environment, University of South Carolina, 701 Sumter Street, Columbia, SC 29208, USA); Gitu, Josiah (Nairobi City Water and Sewerage Company Ltd, Kampala Road, Nairobi, Kenya); Mwaura, Mbutu (Nairobi City Water and Sewerage Company Ltd, Kampala Road, Nairobi, Kenya); Mulwa, Richard (Environment for Development-Kenya, Department of Economics and Development Studies, University of Nairobi, Harry Thuku Road, Gandhi Wing Room 309, P.O Box 30197 Nairobi, Kenya); Cook, Joseph (School of Economic Sciences, Washington State University, 101 Hulbert Hall, PO Box 646210, Pullman WA 99164-6210, USA) |
| Abstract: | Utilities across the global require stable revenue streams to provide customers access to high quality energy, water, sanitation, and other essential services. This requires policy makers to set prices to cover costs, promote the efficient use of resources, and ensure services are affordable. It also requires that customers pay their bills. Historically, utilities have used disconnections, or the threat of disconnection, to compel customers to pay their bills on time. However, the increasing recognition of the human rights to water and sanitation by many governments and the COVID-19 pandemic have led some water utilities to discontinue or curtail disconnections. Reducing arrears and encouraging on-time bill payment is essential to get utilities in the Global South on the path to financial sustainability. This raises an important question for scholars and policy makers alike: if disconnection for essential services is viewed as socially or politically unacceptable, how can utilities encourage customers to pay their bills? In partnership with the water utility serving Nairobi, Kenya, we test the impact of a set of simple, low-cost reminders on customer bill payment using a pre-registered, randomized controlled trial of 50, 000 residential customers. We use four measures of payment behavior: making any payment, paying the full current month’s bill, total arrears accumulated over the six months when messages were sent, and the fraction of the cumulative 6-month bill paid. We find that SMS-based bill payment reminders were not effective at improving bill payment on average. Nudges alone seem unlikely to solve the problem of water debt. |
| Keywords: | water; sanitation; information provision; field experiment; bill payment; Africa |
| JEL: | C93 D91 O13 Q25 Q56 |
| Date: | 2024–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunefd:2024_013 |
| By: | Swati Singla (Department of Economics, Delhi School of Economic); Vishruti Gupta (Department of Economics, Delhi School of Economic) |
| Abstract: | We examine duopoly competition between firms with asymmetric quality, wherein firms compete sequentially in quality and price. We find that the partial shareholding of the high-quality firm in revenue (or profit) of the low-quality firm softens the competition. The market share of the high-quality firm decreases as the percentage of the share in revenue (or profit) increases. Further, we find that the improvement in quality by high-quality firm is lesser than by low-quality firms. The price charged by the high-quality firm is higher than that of the low-quality firm as the high-quality firm continues to have the quality advantage. Comparing the two scenarios, revenue sharing is more desirable than profit sharing for firms, giving higher total profits.Consumers and social planner prefer profit sharing between the firms as it leads to a higher surplus. |
| Keywords: | Revenue share, Profit share, Vertical differentiation, Hoteling line. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cde:cdewps:353 |
| By: | Giovanni Maggi; Monika Mrázová |
| Abstract: | We examine the potential role of international agreements on product standards through a stylized model where countries have different regulatory preferences and firms incur fixed costs of regulatory diversity. Overall, our analysis suggests that the common perception of regulatory agreements as playing a key role in promoting harmonization may have been overstated. We show that regulatory harmony can arise even in the absence of an agreement, and that “spontaneous” harmonization may be inefficient, suggesting that the role of regulatory agreements could be to promote regulatory diversity rather than harmonization. Moreover, the role of regulatory cooperation depends in important ways on the pattern of trade: in the presence of intra-industry trade, the potential role of an agreement tends to be more limited, and under some conditions it can only play a coordination role. Finally, through the lens of our model, we examine the “Pop Critique” of regulatory agreements, according to which lobbying by corporate interests may lead to welfare-reducing harmonization. Our analysis lends only limited support to this critique. |
| JEL: | F12 F13 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33318 |
| By: | Conall Heussaff |
| Abstract: | Energy prices are higher in the European Union than in most other industrialised economies, presenting a fundamental competitiveness challenge |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bre:polbrf:node_10517 |
| By: | Avichai Snir (Bar-Ilan University [Israël]); Daniel Levy (RCEA - Rimini Center for Economic Analysis, Emory University [Atlanta, GA], Bar-Ilan University [Israël]); Dudi Levy (Bar-Ilan University [Israël]); Haipeng Allan Chen (University of Iowa [Iowa City]) |
| Abstract: | We report the results of surveys we conducted in the US and Israel in 2020, a time when many prices increased following the spread of the COVID-19 pandemic. To assess respondents' fairness perceptions of price increases, we focus on goods whose prices have increased during the pandemic, including some essential goods. Consistent with the principle of dual entitlement, we find that respondents perceive price increases as fairer if they are due to cost shocks than if they are due to demand shocks. However, we also find large differences across the two populations, as well as across goods. |
| Keywords: | Dual Entitlement, Fairness Perceptions, Consumer Antagonism, COVID-19, Pandemic, Price Level, Price Adjustment, Price Increase, Price Rigidity, Sticky Prices |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04854450 |
| By: | Morgenstern, Richard D. (Resources for the Future); Ünel, Burçin; Wolverton, Ann; DeAngeli, Emma (Resources for the Future) |
| Abstract: | Increasingly, the US Environmental Protection Agency (EPA) conducts environmental justice (EJ) assessments as part of its regulatory analyses for new rules. We inventory and evaluate the available EJ analyses for the EPA’s 68 economically significant final rules issued between 2012 and 2024. We find that three-quarters (53) of these rules include an EJ analysis, and 45 of these analyses are at least partially quantitative. The proportion of rules that include an EJ analysis increased from about 60 percent in 2012 to more than 90 percent within the past three years. While many of the quantitative EJ analyses examined only baseline issues, some of the more recent assessments have used more nuanced methods to assess differences in vulnerability, cumulative impacts, and climate risk. Three EJ analyses consider the incidence of costs across population groups. While recognizing the different budget, data, and modeling constraints across EPA program offices, we emphasize the need to consider EJ at the early stages of the analytical process. We also discuss important gaps in data and methods that are key to examining the underlying heterogeneity in concentrations and health risks, EJ impacts of regulatory options, regulatory costs, and net benefits across demographic groups. |
| Date: | 2024–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-24-22 |
| By: | Morell, Alexander |
| Abstract: | A bonus on the fine in response to the defendant running a corporate compliance program is superfluous because working leniency programs provide all the incentives necessary to implement efficient compliance. Others opposed to such a bonus argue that unreduced fines are sufficient to incentivize the adoption of effective corporate compliance programs. Proponents, on the other hand, argue that a reduction in fines conditional on running a corporate compliance program incentivizes more investments in compliance. Both arguments are incomplete. It is true that, generally, sanctions alone provide only suboptimal incentives to invest in compliance because some compliance investments (those in detecting infringements, i.e., "policing") can increase the detection probability for cartels that remain. However, leniency programs provide an additional incentive to invest in compliance to find cartels in-house as all cartelists strive for being the first to report. Comparing the two effects shows that under plausible assumptions the latter dominates, rendering a bonus on the fine superfluous. |
| Keywords: | Corporate compliance programs, leniency programs, antitrust sanctioning, corporate governance |
| JEL: | G34 L22 L41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:306362 |
| By: | OECD |
| Abstract: | Mission-oriented innovation policies (MOIPs) offer a strategic approach to address complex societal challenges like climate change, health crises, and digital transformation. For MOIPs to succeed, tailored governance structures are essential, enabling coordination across sectors and policy areas. This policy paper identifies key governance challenges, such as overcoming institutional silos, integrating funding streams, and managing trade-offs in leadership. It highlights the need for adaptive, flexible governance mechanisms that evolve alongside the mission's life cycle. The paper proposes a framework of five core governance principles: structure, orientation, coordination, implementation, and resources. By following this framework, policymakers can design effective governance systems that align with the mission's theory of change, ultimately enhancing the transformative potential of MOIPs. The recommendations emphasise viewing mission governance as a critical enabler, fostering collaborative and impact-oriented policymaking to tackle complex issues. |
| Keywords: | Collaboration, Governance structures, Mission-oriented policies, missions, Sustainability, Systemic change |
| JEL: | H11 O33 O38 Q54 I18 |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaac:168-en |
| By: | Poloni, Paolo |
| Abstract: | Supervisory data are typically not conceived for statistical purposes or considered “official statistics”, but they are disclosed to the public, either directly by the supervised institutions or indirectly by the competent authorities. This disclosure is required under Pillar 3 of the Basel framework on banking supervision. The aim of the framework is to promote market discipline, whereby market participants monitor the risks and financial positions of banks and take action to guide, limit and price their risk-taking to safeguard financial stability. The disclosure of supervisory data is therefore a public good. In addition, supervisory data can be a reliable source for official statistics such as financial accounts. On the other hand, the nature of supervisory data differs from that of standard official statistics and its quality is subject to a robust assessment framework, with distinct particularities. The aim of this paper is to analyse the EU supervisory reporting framework from an institutional and policy perspective, in view of its potential and desirable evolution over time, including its possible integration with the statistical framework. The paper is split into three main parts. First, it describes the historical and current EU institutional settings, including the role of the European Banking Authority (EBA) reporting framework and the role of the Single Supervisory Mechanism (SSM), focusing on the data quality assessment framework and the publication of supervisory statistics. […] JEL Classification: C81, G21, G28, G38 |
| Keywords: | data integration, data quality, Pillar 3, reporting policy, supervisory reporting |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2024363 |