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on Regulation |
| By: | Seungwhan Chun; Marco Duarte; Cici McNamara; Jason M. Lindo |
| Abstract: | Are state-imposed behavioral remedies effective substitutes for federal antitrust enforcement? We evaluate state regulation of hospital mergers under Certificates of Public Advantage (COPAs). Using hospital data from 1996-2022, we compare COPA-regulated mergers to unregulated mergers with similar anticompetitive potential. In highly concentrated markets, COPA mergers result in 11.1 p.p. lower price growth but 0.5 p.p. greater increases in 30-day mortality rates. We find a negative correlation between price and mortality effects for COPA mergers, consistent with theoretical predictions that binding price caps exacerbate quality deterioration. Our findings suggest that COPA contracts are poor substitutes for traditional antitrust enforcement. |
| JEL: | G38 I11 K21 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34373 |
| By: | Ilona Dielen (Université Paris-Est Créteil, ERUDITE, France; Université Côte d’Azur, CNRS, GREDEG, France); Jeanne Mouton (European Commission, Brussels) |
| Abstract: | This study assesses the effect of Directive 2014/104/EU on the likelihood of success of private actions for damages related to abuse of a dominant position. Based on an original database of 194 decisions between 1988 and 2022 in France, Italy and the United Kingdom, the analysis is based on an identification by difference in differences with fixed country and sector effects. The effect is estimated by targeting the cases most likely to be affected by the Directive, namely stand-alone actions for damages. The results reveal a significant differential effect of the Directive, contributing to the empirical assessment of its impact on the effectiveness of the right to compensation in private competition litigation. |
| Keywords: | Competition law, damages actions, private remedies, abuse of dominant position, EU directive, impact assessment, law economy |
| JEL: | K21 K41 C21 H83 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-42 |
| By: | Gambato, Jacopo; Ganglmair, Bernhard; Krämer, Julia |
| Abstract: | In a model of asymmetric regulation, a firm can comply with two regulatory targets, and a regulator can audit the firm for compliance. Inspection by the regulator is imperfect, and it assesses the firm's compliance with the targets with different success probabilities. The firm fully complies only if compliance costs are low. Otherwise, the firm always prioritizes the requirement that is easier to enforce. Expanding regulatory capacity positively affects compliance with the easy-to-enforce target; however, a higher capacity can harm compliance with the hard-to-enforce target. |
| Keywords: | agency resources, asymmetric enforcement, compliance, multi-tasking, regulation |
| JEL: | H32 K20 L51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:330314 |
| By: | Matias Iaryczower; Gabriel Lopez-Moctezuma; Paola Moscariello |
| Abstract: | In this paper, we quantify the distortions induced by career concerns within the Federal Open Market Committee (FOMC). We combine a structural approach with an unanticipated change in the information available to the public about internal committee deliberations. We show that—given the policy preferences of Fed Presidents and Board Governors serving in the FOMC—agents' incentives to appear competent and unbiased outweigh the distortions induced by anti-pandering and conformity. Relative to a counterfactual with no reputational considerations, career concerns improve the welfare of an unbiased principal. Given our estimates of career concerns, Transparency improves welfare relative to an Opaque regime in which internal deliberations are not made public. In a counterfactual exercise, we show that greater heterogeneity in regional shocks reduces conformity but increases policy errors under Transparency. |
| JEL: | C57 D78 E58 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34394 |
| By: | Axel Gautier; Jean-Christophe Poudou |
| Abstract: | In many industries, platforms compete with incumbents that are open to all consumers, whereas platforms require user affiliation. Consequently, platforms face two layers of competition: for the market, to attract users, and in the market, to compete with incumbents. We develop a dynamic model integrating these layers, showing that as platform affiliation grows, in the market competition intensifies, pushing incumbents toward more aggressive pricing. Conversely, for the market competition diminishes, reducing the platform's incentive to compete aggressively. This interplay generates dynamic pricing behavior that can be non-monotonic over time, capturing the shifting incentives driving platform-incumbent competition across both dimensions. |
| Keywords: | platform competition, Uber economy, competition for the market, market affiliation |
| JEL: | L11 L13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12218 |
| By: | Simplice A. Asongu (Oxford, UK); Sara Le Roux (Oxford, UK) |
| Abstract: | The study investigates the role of governance (i.e., ‘voice & accountability’, political stability/no violence, regulatory quality, government effectiveness, corruption-control and the rule of law) in the incidence of short-term debt services on infrastructure development in the perspective of telecommunication infrastructure and access to electricity. The focus of the study is on 52 African countries for the period 2002-2021. The generalized method of moments is employed as estimation strategy and the following findings are established. Debt service has a negative unconditional effect on access to electricity and telecommunication infrastructure. Governance dynamics moderate the negative effect of debt service on infrastructure dynamics. Effective moderation is from regulatory quality and corruption-control for access to electricity and from government effectiveness, regulatory quality, corruption-control and rule of law, for telecommunication infrastructure. Policy implications are discussed. |
| Keywords: | Debt service, governance; information technology; access to electricity; Africa |
| JEL: | F34 H63 O10 O40 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/027 |
| By: | Melita Van Steenberghe; Marten Ovaere (-) |
| Abstract: | Inefficient market responses to renewable support schemes can increase costs and undermine decarbonization efforts. We study two-way Contracts for Difference (CfDs), which stabilize generator revenues but may distort generation incentives. Exploiting variation across support schemes and CfD design rules for offshore wind farms in Great Britain, we apply difference-in-differences to hourly unit-level data to provide the first ex-post evidence on CfDinduced inefficiencies in day-ahead and balancing markets. Market-based wind farms reduced output by 69-83% during negative-price hours; CfD-backed units showed a similar reduction when payments were suspended after six or more consecutive negative-price hours. CfDs also distort the balancing market: generators curtail output by 28% less when they receive payments that cover the negative imbalance price; when they must repay, they curtail 19% more when the imbalance price drops below the payment. From 2019–2024, day-ahead market distortions resulted in 2.9 TWh excess generation, costing £176 million in support. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1124 |
| By: | Luigi Foscari; Emanuele Guidotti; Nicol\`o Cesa-Bianchi; Tatjana Chavdarova; Alfio Ferrara |
| Abstract: | We study the emergence of tacit collusion between adaptive trading agents in a stochastic market with endogenous price formation. Using a two-player repeated game between a market maker and a market taker, we characterize feasible and collusive strategy profiles that raise prices beyond competitive levels. We show that, when agents follow simple learning algorithms (e.g., gradient ascent) to maximize their own wealth, the resulting dynamics converge to collusive strategy profiles, even in highly liquid markets with small trade sizes. By highlighting how simple learning strategies naturally lead to tacit collusion, our results offer new insights into the dynamics of AI-driven markets. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.15995 |
| By: | Heng-fu Zou |
| Abstract: | This paper embeds yardstick competition in a dynamic mean field a mean game (MFG) framework to analyze the regulation of industries with a continuum of cost-reducing firms. Each firm faces a stochastic cost process -- modeled explicitly as Ornstein-Uhlenbeck (OU), Cox-Ingersoll-Ross(CIR), or Geometric Brownian Motion(GBM)-and chooses continuous-time effort to lower cost. A regulator sets each firm's price equal to the contemporaneous mean cost of the population. We formulate and solve the coupled Hamilton-Jacobi-Bellman and Fokker-Planck system describing this economy, prove existence and uniqueness of equilibrium using the Lasry-Lions monotonicity framework, and show that the yardstick mech anism achieves the social first best in closed form. For each diffusion process we derive fully explicit formulas for equilibrium effort, mean cost paths, adjustment speeds, and welfare, allowing complete comparative statics and shock analysis without numerical simulation. The model pro- vides a tractable and policy-ready extension of Shleifer's (1985) original insight, demonstrating that yardstick competition yields robust, efficient incentives even in large dynamic industries subject to stochastic shocks. |
| Date: | 2025–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:796 |
| By: | Mathilde Aubouin (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); Paolo Melindi-Ghidi (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Jean-Philippe Nicolaï (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) |
| Abstract: | This paper revisits the question of whether fixed and mobile Internet expenditures are substitutable or complementary. We estimate a demand system using French household expenditure data to compute price elasticities for different categories of goods. The results indicate that fixed and mobile Internet expenditures are complementary in France. This complementarity effect increases with income level. We then develop a simple theoretical model showing that depending on the characteristics of fixed and mobile data tariffs, fixed and mobile Internet expenditures can exhibit non-substitutability or even complementarity. |
| Keywords: | QUAIDS demand system, Household behavior, Internet expenditure |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05319883 |
| By: | Daniel Ofori-Sasu (Accra, Ghana); Elikplimi Komla Agbloyor (Accra, Ghana); Dennis Nsafoah (New York, USA); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | This study examines the effect of regulatory independence of the central bank in shaping the impact of electoral cycles on bank lending behaviour in Africa. It employs the dynamic system Generalized Method of Moments (SGMM) Two-Step estimator for a panel dataset of 54 African countries over the period, 2004-2022. The study found that banks lend substantially higher during election years, and reduce lending patterns thereafter. The study shows that countries that enforce monetary policy autonomy of the central bank induce a negative impact on bank lending behaviour while those that apply strong macro-prudential independent action and central bank independence reduce lending in the long term. The study provides evidence to support that regulatory independence of the central bank dampens the positive effect of elections on bank lending around election years while they amplify the reductive effects on bank lending after election periods. There is a wake-up call for countries with weak independent central bank regulatory policy to strengthen their independent regulatory policy frameworks and political institutions. This will enable them better strategize to yield a desirable outcome of bank lending to the real economy during election years. |
| Keywords: | Political Economy; Political Credit Cycles, Electoral Cycle; Central Bank Regulatory Independence; Bank lending Behaviour |
| JEL: | D7 D72 G2 G3 E3 E5 E61 G21 L10 L51 M21 P16 P26 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/020 |
| By: | Christopher Hoy (Melbourne Institute of Applied Economic and Social Research); Yeon Soo Kim; Saad Imtiaz; Ana Maria Rojas Mendez; Moritz Meyer; Gustavo Javier Canavire Bacarreza; Lydia Kim; William Hutchins Seitz; Imane Helmy; Ikuko Uochi; Sering Touray; Juni Singh; Bambang Suharnoko Sjahrir; Utz Pape; Alan Fuchs; Trang Van Nguyen; Defne Gencer; Min A Lee; Akiko Sagesaka; Ivette Contreras |
| Abstract: | Public opposition is a major barrier to economic reforms, such as subsidy removal.Using multilayered, randomized survey experiments with 10, 000 respondents across ten surveys in five countries, this paper shows that opposition to energy price reforms is shaped more by design and communication than by cost. Around 70 percent of respondents strongly opposed a 100 percent immediate price increase, but resistance was nearly halved when reforms were phased in, targeted at high-energy consumers, or paired with compensation. Informational messages also reduced opposition by as much as halving the price increase. An expert prediction survey revealed systematic misunderstandings: specialists underestimated the influence of design features and greatly misperceived coping strategies and compensation preferences. These findings demonstrate that behavioral biases—such as present bias, loss aversion, and fairness heuristics—are as influential as economic costs in shaping people’s opposition to economic reforms, underscoring the importance of careful design and communication of politically sensitive reforms. |
| Keywords: | Political Economy, Public Finance, Subsidies, Climate Change, Energy Policy |
| JEL: | D04 D80 D90 H20 H30 H50 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iae:iaewps:wp2025n14 |
| By: | Oliver Ruhnau (Institute of Energy Economics at the University of Cologne (EWI)); Paul Lehmann (University of Leipzig, Faculty of Economics and Management Service) |
| Abstract: | Many administrations, including the EU and the US, have introduced substantial support policies for electrolytic hydrogen. However, interactions of such policies with existing climate policies remain poorly understood. Here, we combine an analytical and a numerical model to investigate the combination of emissions trading, renewable electricity subsidies, and electrolytic hydrogen support. We find that supporting hydrogen reduces renewable subsidies, while emissions prices increase unless the operation of hydrogen electrolysis flexibly responds to electricity prices. Even without explicit regulations on electricity sourcing, the increase in electricity demand for hydrogen production is almost entirely covered by additional renewable electricity generation. If subsidized hydrogen is explicitly required to be matched with additional renewable electricity (“green hydrogen”), the amounts of emissions and renewable electricity remain constant, but the prices of emissions and electricity decline, and support costs for renewable electricity and hydrogen increase. Overall, matching requirements inflate the hydrogen-policy-related system costs by 2–7%. We conclude that promoting the price-responsiveness of hydrogen electrolysis offers greater potential for synergies with emissions trading and renewable electricity subsidies than enforcing strict matching requirements. |
| Keywords: | Environmental policy; electrolytic hydrogen; emissions trading; renewable energy; energy markets; welfare and redistribution; demand-side flexibility |
| JEL: | C61 D47 Q21 Q28 Q41 Q48 |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:ris:ewikln:021699 |
| By: | Simplice A. Asongu (Johannesburg, South Africa); Samba Diop (Bambey, Senegal); Ekene ThankGod Emeka (Nsukka, Nigeria); Amarachi O. Ogbonna (Bengaluru, India) |
| Abstract: | This study investigates how governance and infrastructure moderate the effect of natural resource rents on economic growth using a sample of 110 countries, including 47 African countries from 2000 to 2018. The empirical evidence is based on Panel Smooth Transition Regressions (PSTR). The following findings are established. First, the nexus between economic growth and natural resources is not linear and the underlying non-linearity is contingent on existing infrastructural and governance levels. Second, evidence of a “natural resource curse†is apparent in countries with extremely low levels of governance and infrastructural development. Third, the favorable effect of natural resources on economic growth requires a governance threshold of -1.210 and an infrastructure threshold of 2.583, indicating that countries with governance and infrastructure levels higher than these values tend to benefit much more from the wealth of natural resources. With high levels of the transition variables (governance and infrastructure), the established thresholds are low and situated between the 5thand the 10th percentiles. Countries identified below the established thresholds are mainly from Africa. Policy implications are discussed with specific emphasis on African countries. |
| Keywords: | Natural Resources; Economic Growth; Governance; Infrastructure; Threshold; Panel Smooth Transition Regressions; Generalised Method of Moments; Panel |
| JEL: | H10 Q20 Q30 O11 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/013 |