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on Regulation |
| By: | Maurice E. Stucke (University of Tennessee Winston College of Law) |
| Abstract: | Generative artificial intelligence (AI) is reshaping how companies profile individuals, create and target ads, and influence behavior—often in ways that undermine privacy, autonomy, and democracy. This article explores a critical but overlooked question: how AI affects the relationship between competition and privacy. Increased competition in the AI supply chain may seem like a solution to Big Tech's dominance, but when firms are rewarded for surveillance and manipulation, more competition can actually make things worse. Drawing on recent market trends and twenty state privacy laws, the Article shows how the existing legal frameworks-even those designed to protect privacy—fall short and may unintentionally entrench the power of few data-opolies. It argues that privacy and competition must be addressed together, not in silos, and offers specific legislative reforms to help align business incentives with public interests. Without stronger guardrails, AI risks accelerating a race to the bottom—fueled not only by powerful technologies, but by well-intentioned, but flawed policies. |
| Keywords: | Antitrust, privacy, monopolies, data, artificial intelligence |
| JEL: | K21 K24 L40 L41 L50 O33 |
| Date: | 2025–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:thk:wpaper:inetwp236 |
| By: | Briglauer, Wolfgang; Katz, Raúl L.; Jung, Juan |
| Abstract: | This paper provides a comprehensive empirical analysis of the economic impact of submarine cable (SMC) infrastructure, which is critical for global digital connectivity and carries almost all intercontinental data traffic. Despite their fundamental role in the digital economy, robust evidence on the economic returns of SMC investments is very scarce. To address this, we use a panel dataset of developed countries and causal identification strategies, such as two-way fixed effects models and instrumental variables exploiting exogenous variation from factors like a country's coastline length and legacy market competition. First, our analysis establishes that increased international bandwidth (IBW) capacity resulting from submarine cable deployment significantly improves broadband quality by increasing speeds and reducing latency. We then quantify the impact on broadband demand, finding distinct yet robust demand elasticities for mobile and fixed services. We find that a 1% increase in IBW capacity drives mobile broadband demand up between 0.044% and 0.088%, while the increase for fixed broadband demand is slightly lower at between 0.041% and 0.062%. Finally, we translate these estimates into a simple cost-benefit framework using an illustrative transatlantic cable project connecting Ireland and the United States. This analysis shows that the substantial GDP spillovers - quantified at between US$121.05 billion and US$163.09 billion for the Irish landing site alone - overwhelmingly exceed the total private deployment costs of $180-$260 million. Our findings affirm that SMC deployments generate significant positive externalities and high social returns. While it has been argued that these effects are critical to developing nations lacking infrastructure, our findings indicate this to also be applicable to advanced economies. Consequently, we argue that policymakers in coastal nations have a strong economic incentive to facilitate private investment by reducing regulatory barriers and transaction costs associated with, for example, cable permits and landing stations. |
| Abstract: | Dieses Papier bietet eine umfassende empirische Analyse der wirtschaftlichen Auswirkungen von Unterseekabel-Infrastruktur (SMC), die für die globale digitale Konnektivität von entscheidender Bedeutung ist und nahezu den gesamten interkontinentalen Datenverkehr trägt. Trotz ihrer fundamentalen Rolle in der digitalen Wirtschaft gibt es bislang nur sehr wenige belastbare Belege über die wirtschaftlichen Erträge von Investitionen in Unterseekabel. Um diese Lücke zu schließen, verwenden wir ein Panel-Datenset entwickelter Länder sowie kausale Identifikationsstrategien wie Zwei-Wege-Fixed-Effects-Modelle und Instrumentvariablen, die exogene Variationen aus Faktoren wie der Küstenlänge eines Landes und dem historischen Wettbewerbsniveau auf dem Markt nutzen. |
| Keywords: | Submarine cables, economic impact, costs and benefits, panel econometrics |
| JEL: | L50 L52 L86 L96 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ecoarp:328265 |
| By: | Nicholas Economides (Stern School of Business, New York University, New York, NY, USA); Przemyslaw Jeziorski (Haas School of Business, UC Berkeley, Berkeley, CA, USA) |
| Abstract: | In many developing countries of Africa and Asia, cell phones are used (i) to transfer money across individuals; (ii) to securely self-transport money, and (iii) to save/store money. These banking networks ride on top of wireless telecommunications networks. Traditionally, each banking network was confined to the network of a telecom carrier, and transfers were available only within the carrier’s network, making it incompatible with banking networks of other carriers. In Tanzania, mobile banking under incompatibility was well established for a decade until September 2015 when the second, third, and fourth largest carriers established full compatibility of their banking networks. Analyzing a comprehensive dataset of banking transactions provided by a large telecom carrier in Tanzania, this paper discusses pricing under compatibility, contrasts with pricing under incompatibility. We analyze the transaction termination fees (cash-out fees) in this unregulated environment, and assess the individual and collective incentives for compatibility, noting that the largest carrier has remained incompatible. Despite very high prices for transfers across networks set up commercially under compatibility, the introduction of compatibility resulted in substantial consumer surplus gains. We calculate further potential welfare gains under a number of counterfactual regulatory scenarios. |
| Keywords: | mobile money network, compatibility, interoperability, transaction costs, Tanzania, banking, social network, Tanzania, Tigo, Airtel, Vodacom |
| JEL: | O16 O17 O33 L14 L15 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2510 |
| By: | Ahmed S. Alahmed; Audun Botterud; Saurabh Amin; Ali T. Al-Awami |
| Abstract: | We develop a mathematical framework to jointly schedule water and electricity in a profit-maximizing renewable colocated water desalination plant that integrates both thermal and membrane based technologies. The price-taking desalination plant sells desalinated water to a water utility at a given price and engages in bidirectional electricity transactions with the grid, purchasing or selling power based on its net electricity demand. We show that the optimal scheduling policy depends on the plant's internal renewable generation and follows a simple threshold structure. Under the optimal policy, thermal based water output decreases monotonically with renewable output, while membrane based water output increases monotonically. We characterize the structure and intuition behind the threshold policy and examine key special properties. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.19243 |
| By: | Luis van Sandbergen |
| Abstract: | The provision of renewable electricity is the foundation for a sustainable future. To achieve the goal of sustainable renewable energy, Battery Energy Storage Systems (BESS) could play a key role to counteract the intermittency of solar and wind generation power. In order to aid the system, the BESS can simply charge at low wholesale prices and discharge during high prices, which is also called energy arbitrage. However, the real-time execution of energy arbitrage is not straightforward for many companies due to the fundamentally different behavior of storages compared to conventional power plants. In this work, the optimized operation of standalone BESS in the cross-market energy arbitrage business is addressed by describing a generic framework for trading integrated BESS operation, the development of a suitable backtest engine and a specific optimization-based strategy formulation for cross-market optimized BESS operation. In addition, this strategy is tested in a case study with a sensitivity analysis to investigate the influence of forecast uncertainty. The results show that the proposed strategy allows an increment in revenues by taking advantage of the increasing market volatility. Furthermore, the sensitivity analysis shows the robustness of the proposed strategy, as only a moderate portion of revenues will be lost if real forecasts are adopted. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.21337 |
| By: | Nelson, David (The Institute for New Economic Thinking at the Oxford Martin School, University of Oxford); Kinczyk, Ada; Villanueva, Carlos Perez |
| Abstract: | Investors in energy infrastructure during these times of a rapid energy transition face two types of uncertainty. The first is whether a slower than required pace of transition will affect markets in ways that undermine investment cases. These risks can be identified and managed by understanding how the infrastructure, its cost, prices, revenues, and market size, might fit within the existing landscape. A more difficult and speculative risk has surrounded the question of whether an investment case might be undermined if the transition goals are met, but the transition path and direction differ substantially from original expectations. This paper uses scenario analysis of a wide range of different plausible, but less likely, transition paths to develop a fact base on which to assess these transition path risks. The 8 scenarios cover transitions where technology breakthroughs and policy accelerate the development of alternatives including nuclear power, carbon capture and sequestration, hydrogen, distributed renewable energy, and energy efficiency to levels at the edge of what forecasters deem as plausible. Two of the scenarios also look at the impact of accelerated development of renewable energy and hydrogen on a global scale, with opportunities to import technology and energy into Europe, where the economics of imports of electricity or hydrogen make sense. For each of these scenarios, we have developed forecasts of demand, prices, costs, utilization rates, price volatility, and investment, for the relevant energy markets and their technologies. |
| Keywords: | energy pathways, policy risk, risk management, scenarios, uncertainty |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2025-19 |
| By: | Martinez Cillero Maria (European Commission - JRC); Napolitano Lorenzo (European Commission - JRC); Rentocchini Francesco (European Commission - JRC); Seri Cecilia; Zaurino Elena (European Commission - JRC) |
| Abstract: | "Rising market concentration and the dominance of `superstar' firms have sparked concerns about declining competition and innovation. While technological change and globalisation are key drivers, mergers and acquisitions (M&As) may also play a role. This paper investigates whether firms use technological M&As — acquisitions of innovative subsidiaries with patent portfolios — to enhance market power. Using a global panel of 8, 314 publicly listed firms from 2008 to 2020 and a staggered difference-in-differences approach, we find that such acquisitions increase acquiring firms’ markups by 2% on average. Effects are stronger among top R&D investors, US-based firms, and those in high-tech manufacturing. The main mechanism appears to be greater insulation from competitors via acquired patents, which limit knowledge spillovers and raise entry barriers. These findings highlight the need for antitrust policies that balance innovation incentives with the risks of growing market power." |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:wpaper:202503 |
| By: | Paul S. Koh (Yonsei University) |
| Abstract: | Standard empirical tools for merger analysis assume price data, which are often unavailable. I characterize sufficient conditions for identifying the unilateral effects of mergers without price data using the first-order approach and merger simulation. Data on merging firms' revenues, margins, and revenue diversion ratios are sufficient to identify their gross upward pricing pressure indices and compensating marginal cost reductions. Standard discrete-continuous demand assumptions facilitate the identification of revenue diversion ratios as well as the feasibility of merger simulation in terms of percentage change in price. I apply the framework to the Albertsons/ Safeway (2015) and Staples/Office Depot (2016) mergers. |
| Keywords: | Merger, unilateral effect, diversion ratio, upward pricing pressure, merger simulation |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2025rwp-263 |
| By: | Dubois, Pierre |
| Abstract: | We examine pharmaceutical regulations and incentives for innovation from an international perspective, highlighting the public good nature of healthcare innovation and its cross-border diffusion. We summarize the empirical evidence on how push and pull incentives shape R&D investment, innovation, and global access. We emphasize the role of strategic interdependencies and spillovers, including free-riding in R&D financing, learning-by-doing effects, drug shortages, reference pricing, and parallel trade. We then provide new evidence on the international spillovers of pull incentives on innovation, showing that international cooperation and innovative institutions are necessary to better align national regulations with the global objective of sustaining pharmaceutical innovation. |
| Keywords: | Pharmaceutical Regulation, Innovation, R&D, International Spillovers |
| JEL: | L10 L20 I10 I11 I18 |
| Date: | 2025–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131002 |
| By: | Marc Bourreau (Telecom Paris, Institut Polytechnique de Paris, CREST, France, and CESifo); Lukasz Grzybowski (Faculty of Economic Sciences, University of Warsaw); Ángela Muñoz-Acevedo (Deloitte Finance) |
| Abstract: | In this paper, we investigate the potential crowding out of private investment by public subsidies in the deployment of broadband fiber networks. We estimate a model of fiber entry using a rich dataset on fiber deployment for more than 34, 000 municipalities in mainland France from 2014 to 2019. We then assess whether private investment would have occurred in subsidized municipalities in the absence of state aid. We find that in 36% of cases, public subsidies were allocated to municipalities where private entry would have occurred within three years. We estimate that about 902 million euros of the total 2, 203 million euros in total subsidies disbursed by the end of 2019 may have crowded out private investment. However, we also show that the French broadband plan accelerated fiber coverage in subsidized municipalities in the early stages of deployment. |
| Keywords: | State Aid, Ex-Post Evaluation, Broadband, Entry, Coverage, Crowding Out |
| JEL: | D22 L1 L4 L33 L96 H44 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2025-24 |
| By: | Paul S. Koh (Yonsei University) |
| Abstract: | Market definition holds significant importance in antitrust cases, yet achieving consensus on the correct approach remains elusive. As a result, analysts routinely entertain multiple market definitions to ensure the resilience of their conclusions. I propose a simple framework for conducting organized sensitivity analysis with respect to market definition. I model candidate market definitions as partially ordered and use a Hasse diagram, a directed acyclic graph representing a finite partial order, to summarize the sensitivity analysis. I use the Shapley value and the Shapley-Shubik power index to quantify the average marginal contribution of each firm in driving the conclusion. I illustrate the method's usefulness with an application to the Albertsons/Safeway (2015) merger. |
| Keywords: | Market definition, sensitivity analysis, partial order, Hasse diagram, Shapley value |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2025rwp-262 |
| By: | Karine Brisset (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France); Emmanuel Peterlé (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France) |
| Abstract: | Leniency programs encourage corporate cooperation with antitrust authorities by offering immunity or fine reductions for reporting illegal cartels. While prior studies suggest these programs discourage collusion and destabilize existing cartels, experimental evidence in environments with unrestricted communication indicates that the effectiveness of leniency is not clear-cut. We conduct a laboratory experiment in such an environment to examine the interaction between leniency programs and follow-on private damages, proposing the use of Fair Funds to maintain victim compensation and preserve incentives for leniency application. Contrary to theoretical predictions, we find that the prospect of private damages can increase cartel formation, though this effect is mitigated when our Fair Funds compensation scheme is introduced. In addition, leniency applications decline when private damages are introduced, but this decline is partially offset by the presence of Fair Funds. |
| Keywords: | Antitrust, Illegal Cartels, Leniency Programs, Private Damages |
| JEL: | C92 D03 K21 K42 L41 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:crb:wpaper:2025-12 |
| By: | Felix Aidala; Gizem Koşar; Daniel Mangrum; Wilbert Van der Klaauw |
| Abstract: | Consumer demand for “Buy Now, Pay Later” (BNPL) has surged, but the specific attributes consumers value remain unclear. We conduct a novel probabilistic stated choice experiment varying BNPL attributes across hypothetical scenarios to estimate consumers’ underlying preferences and their willingness to pay (WTP) for each feature. Consumers have a negative WTP for the standard bundle, on average, but younger and lower income consumers have stronger demand. Simulating consumer demand with estimated preference parameters reveals that most shifts away from the standard BNPL bundle reduce demand and create a more negatively selected pool of BNPL users, especially when interest is charged. |
| Keywords: | Buy Now Pay Later (BNPL); payment services; financial inclusion; probabilistic stated choices; survey experiment |
| JEL: | G51 G41 C93 R22 |
| Date: | 2025–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:101928 |
| By: | Francisco González (Universidad de Oviedo); Md Rajib Kamal (NTNU Business School, The Norwegian University of Science and Technology); Steven Ongena (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); Shams Pathan (University of Newcastle - Newcastle University Business School) |
| Abstract: | We examine how climate transition risks affect bank liquidity creation using the 2004 U.S. NOx Budget Trading Program (NBP)—a cap and-trade regulation affecting 11 states—as a quasi-natural experiment. Banks in NBP-affected states curtailed liquidity creation, primarily through balance sheet adjustments: reduced lending and risky asset holdings, and increased off-balance sheet exposures. Beyond this mechanism, banks adopted strategic responses to earnings pressure, including slower net interest income growth, greater noninterest income, and expanded derivative use. The effect is stronger for large, riskprone, profitable, and diversified banks, as well those in competitive markets and Democratic-leaning states. Governance matters: banks with higher common ownership are more resilient, while both shortand long-term investor horizons are associated with reduced liquidity creation—especially under shortterm ownership. Results are robust to matching, placebo tests, spillover adjustments, and event-study designs. Overall, climate regulation reshapes bank intermediation through portfolio rebalancing and strategic adaptation, with critical implications for financial stability and climate policy. |
| Keywords: | Climate transition risk, Bank liquidity creation, Nitrogen Oxides (NOx) Budget Trading Program (NBP), Climate regulation, Ownership structure, Bank competition |
| JEL: | G21 G28 G32 G38 Q58 L51 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2575 |
| By: | Wissal Doua (Faculté des Sciences Juridiques Economiques et Sociales - Souissi, Rabat); Mohammed Khariss (Faculté des Sciences Juridiques Economiques et Sociales - Souissi, Rabat) |
| Abstract: | In a context characterized by the scarcity of public resources and the need to modernize infrastructure, PublicPrivate Partnerships have emerged as a strategic alternative that reconciles economic efficiency with the public interest. This study presents a theoretical and empirical literature review on PPPs in the infrastructure sector, drawing on key conceptual foundations as well as a set of case analyses at both international and Moroccan levels. It highlights, on the one hand, the contributions of PPPs in terms of financing, management, and infrastructure project performance, and on the other hand, the challenges related to contractual governance, risk allocation, and access inequalities. Through diverse examples, the study emphasizes that the success of PPPs largely depends on the quality of the institutional, legal, and organizational framework in which they are implemented. It thus offers a critical and structured perspective on the role PPPs can play in the sustainable development of infrastructure, with a particular focus on Morocco's experience. |
| Abstract: | Dans un contexte marqué par la rareté des ressources publiques et la nécessité de moderniser les infrastructures, les partenariats public-privé apparaissent comme une alternative stratégique permettant de concilier efficacité économique et intérêt général. Cette étude propose une revue de littérature intégrative (théorique et empirique) sur les PPP appliqués au secteur des infrastructures, en mobilisant les principaux fondements conceptuels ainsi qu'un corpus d'analyses de cas à l'échelle internationale et marocaine. Elle met en évidence, d'une part, les apports des PPP en termes de financement, de gestion et de performance des projets d'infrastructure, et d'autre part, les défis liés à la gouvernance contractuelle, à la répartition des risques et aux inégalités d'accès. À travers des exemples variés, notre revue de littérature souligne que la réussite des PPP dépend largement de la qualité du cadre institutionnel, juridique et organisationnel dans lequel ils s'inscrivent. Elle offre ainsi une lecture critique et structurée du rôle que peuvent jouer les PPP dans le développement durable des infrastructures, avec un focus particulier sur l'expérience du Maroc. |
| Keywords: | Investment, Infrastructure, PPP, Development, Développement, Investissement |
| Date: | 2025–08–19 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05248764 |
| By: | Phoebe Koundouri; Ebun Akinsete (ICRE8); Angelos Alamanos; Roy Brouwer; Sofia Frantzi; Conrad Landis; Lydia Papadaki; Hezal Sari; Theofanis Zacharatos |
| Abstract: | Water-system stress challenges driven by aridification, rapid urbanization and tourism peaks, irrigation-intensive agriculture, pollution, fiscal underinvestment and entrenched social inequities, need integrated and adaptive policy responses. We present the Global Climate Hub's interdisciplinary approach along with an application framework that was developed under the ERC-funded Water Futures project, aiming to tackle such challenges: We couple cross-sectoral modelling (physical and natural systems, water-energy systems, and economics), digital-twin forecasting and real-time monitoring, with experimental-economics, behavioural-economics and Living Labs to allow stakeholders' feedbacks and solutions' co-design. Through regulated sandboxes and randomized trials, the project tests pricing reforms, behavioural nudges and technological pilots (IoT/AI leak detection, decentralized treatment, nature-based solutions), producing robust socio-economic narratives and distributional metrics to inform investment choices. Preliminary policy guidance urges an iterative evidence loop of modelling-valuation- Living Lab validation and solution co-design, supported by open data, towards equitable tariff design, targeted subsidies, matched innovation financing and capacity building to scale proven solutions. The proposed approach translates diverse theories into operational pathways for resilient, efficient and socially just urban drinking-water systems, offering a replicable blueprint for regions facing water scarcity. |
| Keywords: | Water Resources Management, Socio-technical transformations, Behavioural Economics, Living Labs, Global Climate Hub |
| Date: | 2025–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2558 |
| By: | Sergio A. Correia; Stephan Luck; Emil Verner |
| Abstract: | This paper studies the role of banking supervision in anticipating, monitoring, and disciplining failing banks. We document that supervisors anticipate most bank failures with a high degree of accuracy. Supervisors play an important role in requiring troubled banks to recognize losses, taking enforcement actions, and ultimately closing failing banks. To establish causality, we exploit exogenous variation in supervisory strictness during the Global Financial Crisis. Stricter supervision leads to more loss recognition, reduced dividend payouts, and an increase in the likelihood and speed of closure. Increased strictness entails a trade-off between a lower resolution cost to the FDIC and reduced credit. |
| JEL: | G0 G01 G21 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34343 |