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on Regulation |
| By: | Christoph Graf; Frank A. Wolak |
| Abstract: | Producers in locational pricing markets have the ability to exercise market power by impacting the extent to which transport capacity constraints bind. We extend the single-location residual demand curve concept to a residual demand hypersurface that quantifies the impact of a supplier’s output change at one location on prices at all locations. This concept improves our ability to explain the offers suppliers submit in the Italian locational pricing electricity market and demonstrates why the locations of a firm’s generation capacity determines the size and direction of locational price changes associated with the divestment of a fixed amount of generation capacity. |
| JEL: | L10 L13 Q48 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34272 |
| By: | Marita Freimane |
| Abstract: | In response to growing platform market power, governments seek ways to strengthen the bargaining position of content providers and other suppliers of platforms. Due to information asymmetries between platforms and regulators, top-down interventions— such as mandated transaction prices— are difficult to implement. This paper examines the effects of a bottom-up, bargaining-based regulatory alternative: Australia’s News Media and Digital Platforms Mandatory Bargaining Code. The Code mandates that platforms negotiate payments for content with domestic publishers, backed by final-offer arbitration. Using a difference-in-differences design and granular data from Google News, I show that the Code significantly altered the composition of news content. In particular, the share of content from large foreign publishers increased, while that of major domestic publishers declined—consistent with changes in the relative cost of displaying different types of content. |
| Keywords: | platform regulation, news aggregators, bargaining power, news media |
| Date: | 2025–09–15 |
| URL: | https://d.repec.org/n?u=RePEc:ete:msiper:772000 |
| By: | Eduardo Levy Yeyati; Ángeles Cortesi |
| Abstract: | Artificial intelligence (AI), particularly generative AI, has evolved rapidly, capturing the attention of policy makers, and raising important questions about regulation. This primer provides Latin American lawmakers a comprehensive overview of global AI regulatory efforts, proposes a taxonomy that categorizes the diverse approaches within the region’s socio-economic context, together with a set of guidelines and a toolkit of innovative strategies to address AI regulation in a flexible and forward-thinking manner. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:udt:wpgobi:202411 |
| By: | Brockmann, Fabian (Dept. of Business and Management Science, Norwegian School of Economics); Kohn, Rieke S. (Dept. of Accounting, Auditing and Law, Norwegian School of Economics); Marinelli, Mattia (Dept. of Wind and Energy Systems, DTU Technical University of Denmark) |
| Abstract: | The rapid adoption of electric vehicles (EVs) presents both opportunities and challenges for energy systems. While smart charging algorithms have been widely studied to optimize EV charging schedules, the role of EV users' plug-in behavior that precedes any smart charging remains largely unexplored. This study addresses this critical gap by approximating the human plug-in decision-making process through an agent-based simulation model, capturing how EV users adjust their plug-in behavior in response to status of charge and dynamic electricity prices. Furthermore, we evaluate the impact of plug-in behavior on EV users' charging cost, battery lifetime, and EV fleet peak power demand. Our numerical analysis reveals that a price-sensitive plug-in behavior can substantially decrease charging cost and generally extend battery lifetime, though some users may experience shorter battery lifespans due to deeper discharge cycles. Moreover, this behavior also leads to synchronized charging patterns, increasing peak power demand and potentially straining grid infrastructure. These findings reveal the trade-off between user benefits and grid operation drawbacks, underscoring the need for holistic approaches in the assessment of EV user behavior. Furthermore, our study highlights the importance of user engagement in smart charging technologies. |
| Keywords: | EV; Behavior; Grid; Battery; Cost; Smart Charging |
| JEL: | Q00 Q40 |
| Date: | 2025–09–22 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2025_024 |
| By: | Jules Welgryn; Louis Soumoy |
| Abstract: | Decarbonising European industry requires significant electrification, yet long-term electricity contracting – particularly through Power Purchase Agreements (PPAs) – has failed to take off at scale. While policy makers imagined PPAs as a key tool to reduce risk and encourage investment in both clean electricity and electrified industrial processes, historical data shows that this expectation may be misplaced. In this paper, we bring new theoretical backing to the initially unexpected lack of contracting, by highlighting the intricate relationship between risk and ambiguity in these infrastructure-heavy settings – and show that the irreversible nature of such contract can hinder their signature. To achieve this, we build a bilateral contracting model mimicking contract negotiations between two agents faced with irreversible investment decisions. By addressing these issues, we bridge a literature gap by linking research on industrial decarbonisation, electricity market incompleteness, and risk management.Our bilateral contracting model contributes to several strands of research. It offers a new perspective on market incompleteness for infrastructure-heavy sectors. We then extend the theoretical insights with real-world calibrations, allowing us to determine whether the risk aversion or irreversibility effect dominate in electricity markets. Our findings suggest that high market volatility amplifies the irreversibility premium and the associated opportunity costs of entering contracts, thereby outweighing the effects of ambiguity aversion. Through these results, we also contribute to the literatures exploring electricity market incompleteness as well as industrial decarbonisation under uncertainty - at times where risk and ambiguity are considered as the main barriers preventing rapid decarbonisation investments in these sectors. |
| Keywords: | Electricity Markets, Industrial Decarbonisation, Investment, Real-Options, Incomplete Markets, Risk, Ambiguity |
| JEL: | D21 D25 L94 L97 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2025-37 |
| By: | Johannes Johnen; Robin Ng |
| Abstract: | Ratings play a crucial role in online marketplaces, shaping consumer decisions and firm strategies. We investigate how firms strategically use pricing to influence ratings, and how this undermines ratings as signals of product quality. We develop a two-period model of price competition between an established firm and a potentially high- or low-quality entrant, capturing the challenge high-quality newcomers face in building reputation. Consumers rate based on value-for-money, but cannot distinguish whether positive ratings result from genuine quality or discounted prices. Low-quality entrants take advantage of this and may offer low prices to harvest good ratings in the future, or mimic high prices to signal high quality. We show that ratings harvesting inflates positive ratings, reduces their informativeness, and exacerbates the cold-start problem, discouraging high-quality entry. Our results mirror empirical patterns and generate implications for how rating design affects market outcomes: reducing effort-costs to rate induces more but less-informative ratings, and discourages entry. Policy implications include discouraging excessive discounts for new sellers, incorporating price-paid into rating displays, and balancing rating effort-costs to preserve informativeness. While the effects of individual entrants’ harvesting may appear temporary, harvesting hinders high-quality entrants from building reputation, discouraging entry and causing lasting distortions. |
| Keywords: | Rating and reviews, digital economy, reputation, cold-start problem, biased ratings |
| JEL: | D21 D83 L10 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_509v3 |
| By: | Vojtech Sikl (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague); Zuzana Irsova (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague); Peter Kudela (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague); Anna Kudelova (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague) |
| Abstract: | This meta-analysis synthesizes 4, 521 elasticity estimates drawn from 413 studies to examine the presence of publication and endogeneity bias in the literature. We coded over 100 study-level variables to assess how electricity consumers respond to price changes. Our results show that electricity demand is price inelastic, with an average short-run elasticity of -0.231 and average long-run elasticity of -0.532. However, after correcting for publication bias, the short-run elasticity declines in magnitude to -0.116, while the long-run elasticity adjusts to -0.303. Using Bayesian model averaging, we explore substantial heterogeneity in elasticity estimates. Factors such as declining tariff structures, demographic characteristics, fuel usage controls, daylight hours, and citation frequency significantly affect reported elasticities. In contrast, variables related to average and marginal electricity prices and time-of-use tariffs contribute minimally to the observed variation. |
| Keywords: | meta-analysis, elasticity, price elasticity, electricity, heterogeneity, publication bias, consumer sensitivity |
| JEL: | D01 Q40 Q49 C11 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2025_17 |
| By: | Nina Boyarchenko; Kinda Cheryl Hachem; Anya V. Kleymenova |
| Abstract: | A large literature at the intersection of economics and finance offers prescriptions for regulating banks to increase financial stability. This literature abstracts from the discretion that accounting standards give banks over financial reporting, creating a gap between the information assumed to be available to regulators in models of optimal regulation and the information available to regulators in reality. We bridge insights from the economics, finance, and accounting literatures to synthesize knowledge about the design and implementation of bank regulation and identify areas where more work is needed. We present a simple framework for organizing the relevant ideas, namely the externalities that motivate bank regulation, the rationales for allowing accounting discretion, and the use of discretion to circumvent regulation. Our takeaway from reviewing work in these areas is that academic studies of bank regulation and accounting discretion require a more unified approach to design optimal policy for the real world. |
| JEL: | D62 E44 G21 G28 M41 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34241 |
| By: | Ren\'e A\"id; Philippe Bergault; Mathieu Rosenbaum |
| Abstract: | Recent regulation on intraday electricity markets has led to the development of shared order books with the intention to foster competition and increase market liquidity. In this paper, we address the question of the efficiency of such regulations by analysing the situation of two exchanges sharing a single limit order book, i.e. a quote by a market maker can be hit by a trade arriving on the other exchange. We develop a Principal-Agent model where each exchange acts as the Principal of her own market maker acting as her Agent. Exchanges and market makers have all CARA utility functions with potentially different risk-aversion parameters. In terms of mathematical result, we show existence and uniqueness of the resulting Nash equilibrium between exchanges, give the optimal incentive contracts and provide numerical solution to the PDE satisfied by the certainty equivalent of the exchanges. From an economic standpoint, our model demonstrates that incentive provision constitutes a public good. More precisely, it highlights the presence of a competitiveness spillover effect: when one exchange optimally incentivizes its market maker, the competing exchange also reaps indirect benefits. This interdependence gives rise to a free-rider problem. Given that providing incentives entails a cost, the strategic interaction between exchanges may lead to an equilibrium in which neither platform offers incentives -- ultimately resulting in diminished overall competition. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.10094 |
| By: | Frédéric Dobruszkes |
| Abstract: | This paper revisits the assessment of aviation regulatory regimes through air liberalisation indices (ALIs). Most studies are based on the clauses of bilateral air service agreements (BASAs) that are coded and converted into scores to form an ALI. However, BASAs are commonly amended by memoranda of understanding or other kinds of arrangements that are usually not made publicly available. This paper investigates the gap in ALI values between the original BASAs and further amendments, considering a large range of BASAs signed by Belgium and Brazil with third countries. It is found that the degree of aviation liberalisation of amended BASAs is often significantly higher than the original BASAs’ clauses (Belgium: +86% on average; Brazil: +146%). This confirms that ALIs based on the original BASAs can be significantly biased and underestimate the actual degree of aviation liberalisation. This calls for making all agreements and their subsequent amendments publicly available. We argue this should be done under the auspices of the ICAO. |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/394346 |
| By: | Marie-Estelle Binet (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes, AMURE - Aménagement des Usages des Ressources et des Espaces marins et littoraux - Centre de droit et d'économie de la mer - IRD - Institut de Recherche pour le Développement - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - UBO - Université de Brest - CNRS - Centre National de la Recherche Scientifique); Maria Garcia-Valiñas (Universidad de Oviedo = University of Oviedo); Sara Suarez-Fernandez (Universidad de Oviedo = University of Oviedo) |
| Abstract: | Nudging has emerged as an alternative policy for managing water demand in the residential sector. Indeed, numerous field studies have been recently published to assess the impact of nudges on water consumption. In parallel, a substantial body of literature has developed in the field of behavioral economics, including laboratory experiments to evaluate the effects of nudge-type or boost treatments on individual behavior. However, the corresponding results are frequently overlooked in field studies. In this context, focusing on the residential water sector, the aim of this survey paper are, first, to review field experiments and address key issues in behavioral economics; and second, to present results obtained from laboratory experiments that could enhance nudging policies. We conclude by discussing additional unexplored areas and their policy implications. |
| Keywords: | Experimental economics, Water sustainable management, Nudging |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-04567861 |
| By: | Masayuki MORIKAWA |
| Abstract: | This study estimates the compliance costs of government rules and regulations based on a survey of Japanese workers. The results reveal the following key findings. First, nearly half of all workers engage in tasks related to regulatory compliance. Second, approximately 20% of total labor input is allocated to compliance work, implying a significant negative impact on macroeconomic productivity. Third, compliance-related tasks are linked to perceptions of understaffing and increased overtime. Reducing and streamlining such work has the potential to enhance both productivity and the economic well-being of workers. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rpdpjp:25015 |
| By: | David Cuberes (CLARK UNIVERSITY); Aitor Lacuesta (BANCO DE ESPAÑA); María de los Llanos Matea (BANCO DE ESPAÑA); Daniel Oto-Peralías (UNIVERSIDAD PABLO DE OLAVIDE) |
| Abstract: | En España, la administración que aprueba la instalación de plantas fotovoltaicas difiere en función de si su potencia excede o no los 50 megavatios (MW) de capacidad. Este documento analiza el efecto de dicha regulación sobre la capacidad de las plantas instaladas. A diferencia de lo que ocurre en otros países, se observa una discontinuidad en la relación entre el número de plantas fotovoltaicas y su capacidad en el rango comprendido entre 40 y 50 MW. Un análisis basado en una muestra de proyectos aprobados en 2024 sugiere que esta discontinuidad podría deberse a un comportamiento estratégico del promotor, motivado por unos mayores tiempos de tramitación de la autorización administrativa —a cargo de la Administración General del Estado (AGE)— en los proyectos de más de 50 MW y por diferencias en los criterios de aprobación entre la AGE y algunas comunidades autónomas, si bien el mencionado análisis no constituye evidencia concluyente al respecto. Esta discontinuidad, visible aun considerando la capacidad conjunta de aquellas plantas próximas y pertenecientes al mismo propietario, podría sugerir la existencia de ineficiencias económicas relacionadas con estas diferencias entre administraciones. |
| Keywords: | energía, plantas fotovoltaicas, parques fotovoltaicos, regulación, fragmentación de proyectos |
| JEL: | D22 L51 L94 Q42 Q48 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bde:opaper:2519 |