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on Regulation |
| By: | Sarah Wheeler (Flinders University of South Australia, University of Adelaide); Céline Nauges (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); R. Quentin Grafton (ANU - Australian National University) |
| Abstract: | The allocation of water across space and time is a key challenge of water governance, with demand and supply often not well matched over time and place. Best practice water pricing and markets may promote water conservation, yet their application is limited. We highlight the governance principles needed for best practice water pricing and water markets, describe differences across regions, and provide six key water demand governance recommendations, for both Global North and Global South countries. |
| Keywords: | Global South, Global North, water trade, water markets, water crisis, water security, climate change, sustainable development, taxes, costs, tariffs, subsidies. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05143769 |
| By: | Stefano Bolatto; Elias Carroni; Riccardo Pesci; Michele Rabasco |
| Abstract: | In addition to self-production and individual disconnection from the national grid, the ongoing decentralization of the electricity market increasingly relies on energy-sharing mechanisms such as energy communities (ECs). This paper presents a parsimonious model that captures key features of the ECs, focusing on how cost and benefit allocation among community members influences net producers' energy contributions and, consequently, the total amount of energy shared within the community. The model accounts for heterogeneity among net producers in terms of residual generation capacity and distinguishes between two net consumer groups with different energy needs. It also incorporates crucial factors such as participation fees, the distribution of economic benefits among market participants, and the impact of sharing congestion externalities. The analysis shows how different sharing rules affect total energy exchange within the community and, in turn, the welfare distribution among participants. |
| JEL: | D16 D25 D70 L50 L94 O42 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1204 |
| By: | Julien Ancel (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay, CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres, ENPC - École nationale des ponts et chaussées) |
| Abstract: | Time-varying retail tariffs play a key role in activating demand-side flexibility in power systems.In retail markets, such tariffs compete with constant-in-time, or flat, tariffs. We investigate how the coexistence of these two tariff types influences their respective pricing levels and adoption rates among a diverse consumer base. To this end, we propose a multi-leader-followers model featuring a continuum of consumers characterized by their penalization of responding to price changes at the lower level and two competing retailers at the upper level. One retailer offers a time-varying tariff and the other a flat one. We derive the equilibria of the retail market under various assumptions about each retailer's responsiveness to the other's decisions, and compare the outcomes with those under a regulated monopolist retailer. We then provide a numerical application of the results based on the French electricity retail market. At equilibrium, the time-varying tariff's dynamics is dampened relative to the first-best real time price due to competitive pressure from the flat tariff and the distribution of consumers. When the time-varying tariff is known ex-ante, competition leads to lower or more uncertain adoption of the time-varying tariff compared to a monopolistic retailer offering both tariffs. When it is not, the monopolistic retailer option seems less attractive in terms of mobilized demand-side flexibility than retail competition, notably if consumers overestimate electricity prices on average. In that case, less flexible consumers bear the cost of imperfectly forecasting the tariff levels. |
| Keywords: | Power retail, Price competition, Dynamic tariffs, Demand response |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05100663 |
| By: | Claude d'Aspremont; Rodolphe Dos Santos Ferreira |
| Abstract: | We consider the concept of Cournotian monopolistic competition equilibrium as a tractable way of taking the strategic behaviour of large firms into account in a general equilibrium framework. Existence is obtained under simple assumptions, ensuring in particular uniqueness of Cournot equilibrium for each group of firms. An extension of the concept, allowing intrasectoral competitive behaviour to vary in intensity is also examined. |
| Keywords: | Oligopolistic and monopolistic competition. Uniqueness of Cournot equilibrium. |
| JEL: | D43 D51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2025-21 |
| By: | Arne Lilienkamp (Institute of Energy Economics at the University of Cologne (EWI)); Nils Namockel (Institute of Energy Economics at the University of Cologne (EWI)); Oliver Ruhnau (Institute of Energy Economics at the University of Cologne (EWI)) |
| Abstract: | The ongoing transition of our energy systems implies a rise of distributed generators, batteries, and new consumers, including electric vehicles and heat pumps. Previous studies have found that distributed flexibility may substantially benefit wholesale electricity markets, but have neglected that these benefits maybe subject to distribution grid constraints. Here, we propose using a virtual storage approach to aggregate the net load and flexibility of individual consumers at the distribution grid level, subject to the corresponding grid constraints. We apply our approach to flexible electric vehicle charging scenarios in German distribution grids for the years 2030 and 2045. Our results suggest that distributed flexibility exacerbates distribution grid congestion if it only follows wholesale market prices. However, there may be the potential to alleviate local congestion with stable wholesale market benefits of distributed flexibility. Local coordination of distributed flexibility appears to be able to resolve distribution grid constraints at substantially lower costs than expanding transformer capacity. We conclude that local coordination mechanisms are key to unlocking the wholesale market benefits of distributed flexibility while mitigating hazards in the distribution grids. |
| Keywords: | Electric vehicles; Distribution grids; Energy system modeling; Flexibility; Grid expansion |
| Date: | 2025–07–14 |
| URL: | https://d.repec.org/n?u=RePEc:ris:ewikln:021403 |
| By: | Nicholas Bloom; Jonathan S. Hartley; Raffaella Sadun; Rachel Schuh; John Van Reenen |
| Abstract: | We show better-managed firms are more dynamic in plant acquisitions, disposals, openings, and closings in U.S. Census and international data. Better-managed firms also birth better-managed plants and improve the performance of the plants they acquire. To explain these findings, we build a model with two key elements. First, management is a combination of firm-level management ability (e.g. CEO quality), which can be transferred to all plants, and plant-level management practices, which can be changed through intangible investment (e.g. consulting or training). Second, management both raises productivity and also reduces the operational costs of dynamism: buying, selling, opening, and closing plants. We structurally estimate the model on Census microdata, fitting our key dynamic moments, and then use it to establish three additional results. First, mergers and acquisitions raise economy-wide management and productivity by reallocating plants to firms with higher management ability. Banning M&A would depress GDP and management by about 15 percent. Second, greater product market competition improves both management and productivity by reallocating away from badly managed plants. Finally, management practices account for about a fifth of the cross-country productivity differences with the U.S. |
| Keywords: | Management practices; mergers and acquisitions; productivity; competition |
| JEL: | L2 M2 O32 O33 |
| Date: | 2025–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:101259 |
| By: | Kai Fischer; Simon Martin; Karl Schlag |
| Abstract: | We develop a tractable model of competitive price cycles where prices are chosen alternatingly and consumers have heterogenous information. The model yields sharp empirical predictions about price patterns, impact of captive consumers and pass-through. Using rich station-level price data from the German retail gasoline market, we test these predictions. Consistent with the model, we find price cycles, characterized by frequent small price cuts and infrequent sharp increases. These cycles shorten as costs rise and are more likely to be initiated by firms with more captive consumers. Pass-through of input costs is incomplete, in contrast to alternative theories. |
| Keywords: | price cycles, tacit collusion, coordination, gasoline markets |
| JEL: | D43 D83 L11 L41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11971 |
| By: | Gian Luigi Albano (Consip S.p.A. and LUISS Guido Carli University); Walter Ferrarese (Universitat de les Illes Balears); Roberto Pezzuto (DEF, University of Rome "Tor Vergata") |
| Abstract: | We show that in a single-lot low-price auction, a merger can be simultaneously profitable and increase the buyer’s surplus, even in the absence of cost synergies. Thus the buyer’s purchasing price may go down even when a lower number of bids is submitted. In determining our main result we highlight the role of firms’ cost exhibiting a discontinuity due to short-term capacity constraints or non-linear contractual agreements. The paper contributes to a new strand of literature showing that in bidding markets the lack of merger-induced synergies does not necessarily imply worse outcomes for the buyer. Hence the Authorities need not worry about resorting to possibly convoluted assessment of the attainability of this kind of efficiencies. |
| Keywords: | Horizontal Mergers, Buyer Surplus, Cost Discontinuity |
| JEL: | L11 L23 L51 |
| Date: | 2025–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:607 |
| By: | Willy Lefez (Humboldt Universität) |
| Abstract: | We study price discrimination by a monopolistic seller that endogenously produces a market segmentation at a cost, and question the efficiency of the production of market segmentations led by private incentives. We show that the efficient market segmentation gives all the gains in total surplus to the buyer, and the seller profit stays at the uniform profit level. Our result suggests that the private production of information by sellers to price discriminate is significantly inefficient. |
| Keywords: | Price Discrimination, Cost of Information, Production of Information.; cost of information; production of information; |
| JEL: | D42 D83 L12 |
| Date: | 2025–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:535 |
| By: | Kinda Hachem |
| Abstract: | Decisions that are privately optimal often impose externalities on other agents, giving rise to regulations aimed at implementing socially optimal outcomes. In the banking industry, regulations are particularly heavy, plausibly reflecting a view by regulators that the relevant externalities could culminate in financial crises and destabilize the broader economy. Over time, the toolkit for regulating banks and bank-like institutions has expanded, as has banks’ restructuring of activities into shadow banking to lessen the regulatory burden. This post, based on our recent Staff Report, explores the optimal mix of prudential tools for bank regulators in a wide range of environments. |
| Keywords: | banking; shadow banking; optimal regulation; pecuniary externality; bailout; Bail-in |
| JEL: | E61 G21 |
| Date: | 2025–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:101335 |
| By: | Céline Gauthier-Maxence (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 nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | The Siri Case, triggered by a complaint filed by the Ligue des droits de l'Homme against Apple in February 2025, raises critical legal questions about nonconsensual voice recordings under French and European law. At its core lie the GDPR's strict consent requirements, the French Penal Code's prohibitions on illicit recordings, and emerging jurisprudence on digital privacy. This paper analyzes Apple's potential liability in light of past precedents, including settlements in the U.S. and evolving European regulatory standards. It also considers the broader implications for data protection enforcement, cross-border data transfers, and the future regulation of voice assistants. Ultimately, the case may mark a turning point in harmonizing European responses to privacy violations by AI-driven technologies. |
| Keywords: | Data protection, GDPR, privacy law, non-consensual recordings |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05064735 |
| By: | Charles Taragin; Marco Taylhardat |
| Abstract: | We propose a simple algorithm for defining merger-specific geographic antitrust markets based on merging firm proximity. Applying it to over a thousand hypothetical bank mergers, we compare concentration measures in our markets to those defined by the Federal Reserve, which are not merger-specific, finding broad agreement but also offering potential improvements upon current definitions. |
| Keywords: | Market definition; Bank mergers; Computational methods |
| JEL: | G34 L40 C63 |
| Date: | 2025–07–08 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2025-51 |
| By: | Alexander Copestake; Mr. Divya Kirti; Maria Soledad Martinez Peria; Yao Zeng |
| Abstract: | Payments technologies pose an economic dilemma: network effects can lead to a small number of dominant platforms, but efforts to increase choice can risk market fragmentation. We examine whether interoperability can help resolve this tension, using data from India’s Unified Payments Interface—the world’s largest fast payment system by volume—as well as from a major pre-existing fintech firm. When the two networks became interoperable, overall usage of digital payments rose. Consistent with a model of payment choice that we propose, this increase was driven by regions where digital payments were more fragmented across platforms ex ante. Our model implies that the unification of networks increased total usage of digital payments by more than 50% in the year after integration. |
| Keywords: | Payments; Interoperability; Networks; FinTech; UPI |
| Date: | 2025–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/126 |
| By: | Sophia Kazinnik; Erik Brynjolfsson |
| Abstract: | This paper examines how central banks can strategically integrate artificial intelligence (AI) to enhance their operations. Using a dual-framework approach, we demonstrate how AI can transform both strategic decision-making and daily operations within central banks, taking the Federal Reserve System (FRS) as a representative example. We first consider a top-down view, showing how AI can modernize key central banking functions. We then adopt a bottom-up approach focusing on the impact of generative AI on specific tasks and occupations within the Federal Reserve and find a significant potential for workforce augmentation and efficiency gains. We also address critical challenges associated with AI adoption, such as the need to upgrade data infrastructure and manage workforce transitions. |
| JEL: | C8 C9 G4 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33998 |
| By: | Cowhey, Peter |
| Abstract: | Digital technology is seeping into every corner of society. As the pace of technological change accelerates over the next decade, digitalization is poised to impose profound changes on the international political economy. A new digital regime is evolving to govern these effects, although it is uncertain how this regime will develop amid tectonic shifts in governing establishments, world geopolitics, and the scope of economic globalization. A broad array of interests are contesting how digital governance will play out across the globe, from digital businesses big and small to politicians balancing security and economic growth objectives. Uncertainty predominates, but looking at previous historical instances where new technology demanded cross-border governance can reveal clues as to how a digital regime can take shape in a more sovereignty-oriented world. This report explores the digital order that underlies transnational tensions over regulating digital technologies, finding that the contours of the emerging digital regime will depend on how policymakers thread the needle between national security and fostering innovation, a balancing act for which the outcome is currently unclear. |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2025–06–02 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:globco:qt76q4n61d |
| By: | U.S. Environmental Protection Agency (EPA) |
| Abstract: | The Technical Guidance for Assessment Environmental Justice in Regulatory Analysis is designed to help EPA analysts evaluate potential environmental justice (EJ) concerns associated with EPA regulatory actions. It provides recommendations for analysts on how to assess the existence of EJ concerns prior to the rulemaking and whether such concerns are exacerbated, mitigated, or remain unchanged for each regulatory option under consideration. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ags:enecgd:348895 |
| By: | U.S. Environmental Protection Agency (EPA) |
| Abstract: | EPA's Guidelines for Preparing Economic Analyses establish a sound scientific framework for performing economic analyses of environmental regulations and policies. They incorporate recent advances in theoretical and applied work in the field of environmental economics. The Guidelines provide guidance on analyzing the benefits, costs, and economic impacts of regulations and policies, including assessing the distribution of costs and benefits among various segments of the population. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ags:enecgd:348896 |