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on Regulation |
| By: | Comisión Nacional de los Mercados y la Competencia (CNMC) (Comisión Nacional de los Mercados y la Competencia (CNMC)) |
| Abstract: | Behavioural economics has great potential to enhance the effectiveness and efficiency of regulations, public policies, and supervision, thereby benefiting the proper functioning of markets, consumers, and the economy. These instruments are flexible, respect freedom of choice, and are very low-cost. Therefore, many countries use these instruments systematically. To promote their use in Spain, the CNMC recommends creating a regulatory framework on the subject, including behavioural units, networks of experts, human capital, and integration into international forums. Second, adopting behavioural economics in the design and evaluation of regulations and public policies, promoting guidance documents, transparency, experimentation, and a sandbox. Third, introducing a behavioural approach into the work of supervisors, also promoting prevention and awarenessraising measures, and fostering collaboration between institutions. |
| Keywords: | Regulation, Supervision, Competition, Behavioural economics, Cognitive biases, Heuristics, Nudges |
| JEL: | C9 D9 K23 L4 L51 |
| Date: | 2025–07–08 |
| URL: | https://d.repec.org/n?u=RePEc:awo:epaper:e/cnmc/002/23_eng |
| By: | Aline Blankertz; Brianna Rock; Nicholas Shaxson |
| Abstract: | This paper presents striking new data about the scale of Google's involvement in the global digital and corporate landscape, head and shoulders above the other big tech firms. While public attention and some antitrust scrutiny has focused on these firms' mergers and acquisitions (M&A) activities, Google has also been amassing an empire of more than 6, 000 companies which it has acquired, supported or invested in, across the digital economy and beyond. The power of Google over the digital markets infrastructure and dynamics is likely greater than previously documented. We also trace the antitrust failures that have led to this state of affairs. In particular, we explore the role of neoclassical economics practiced both inside the regulatory authorities and by consultants on the outside. Their unduly narrow approach has obscured harms from vertical and conglomerate concentrations of market power and erected ever higher hurdles for enforcement action, as we demonstrate using examples of the failure to intervene in the Google/DoubleClick and Google/Fitbit mergers. Our lessons from the past failures can inform the current approach towards one of the biggest ever big tech M&A deals: Google's $32 billion acquisition of the Israeli cloud cybersecurity firm Wiz. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.02931 |
| By: | Rohan Best (rohan.best@mq.edu.au); Reinhard Madlener (1- Institute for Future Energy Consumer Needs and Behavior (FCN), School of Business and Economics / E.ON Energy Research Center, RWTH Aachen University, Mathieustrasse 10, 52074 Aachen, Germany; 2- Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology (NTNU), Sentralbygg 1, Gløshaugen, 7491 Trondheim, Norway. November 2023) |
| Abstract: | While developed countries have more advanced energy systems, there is still substantial household-level inequality and persistent energy poverty. Using the UK Understanding Society household survey, we assess waves on either side of energy-price hikes which followed the onset of heightened geopolitical conflict in 2022. Using Locally Weighted Scatterplot Smoothing, we find that distributions of energy expenditure and problems paying bills (including electricity, gas, water, telephone, and other bills) are similar across income, but with a shift up in both outcomes for the 2022-23 wave. This exacerbates policy design challenges for persistent energy poverty problems, motivating specific distributional research. We find that problems paying bills are most pronounced for the bottom income quintile, while energy expenditure rises most from the fourth to the highest quintile. In addition to targeted support for the lowest income quintile, policy changes can be informed by our linear probability and multinomial logit regressions. We find differences in energy outcomes across asset values, such as households with lower vehicle values being less likely to consistently avoid bill-paying problems, justifying consideration of assets for policy eligibility. We also show evidence of fuel switching and energy investments having potential to lower energy bills, and this provides some support for subsidies for upfront costs of energy assets. Further educational assistance could also be useful, as prior problems paying bills are linked to higher current energy expenditure and persistent bill-paying problems. |
| Keywords: | asset; distribution; electricity; gas; income; persistent |
| JEL: | Q41 Q48 I32 D31 H23 C25 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:fcnwpa:021757 |
| By: | Baker, Maher Asaad |
| Abstract: | Purpose This paper provides a critical synthesis of the key developments in the application of behavioral economics (BE) to public policy from 2015 to 2025. It analyzes the field's institutionalization, the evolution of its core concepts, and the significant critiques that have shaped its modern trajectory. Design/methodology/approach This article is a comprehensive literature review, synthesizing findings from published academic papers, institutional reports, and meta-analyses. It systematically maps empirical findings across policy domains and critically examines ethical, methodological, and practical challenges. Findings The review finds that BE has matured from a novel tool into an established field. Mechanisms like defaults, framing, and friction reduction have been widely deployed with varying success. This period has also been defined by a critical reckoning with the replication crisis and ethical debates concerning autonomy. The field is responding by integrating with computational social science and artificial intelligence, moving toward more interdisciplinary and empowering approaches. Originality/value This review offers a nuanced, critical analysis of a pivotal decade in behavioral public policy. It moves beyond cataloging interventions to provide a coherent narrative of institutionalization, challenge, and adaptation. The paper concludes that the field's value lies in fostering a more realistic, evidence-based, and human-centric paradigm for policy design. |
| Keywords: | behavioral economics, literature review, policy design, nudge, choice architecture, public policy, policy design |
| JEL: | B40 D03 D04 D90 H00 |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126231 |
| By: | Christopher Teh (Toulouse School of Economics, France & School of Economics); Chengsi Wang (Department of Economics and Monash Digital Lab, Monash University) |
| Abstract: | This survey explores how startup acquisitions influence innovation and competition. We review two key streams of literature: post-acquisition innovation, which examines whether incumbents develop or terminate acquired projects, and pre-acquisition innovation, which investigates how the prospect of acquisition shapes startups’ and incumbents’ incentives and innovation strategies. We also assess the implications for merger policy design, highlighting recent competition authority responses and dynamic considerations. Our work provides insights into the ongoing debate on how competition policy should regulate startup acquisitions in fast-evolving and uncertain markets. |
| Keywords: | acquisition, innovation, merger policy, startup |
| JEL: | G34 L12 L41 O3 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2025-14 |
| By: | Paul S. Koh (Yonsei University) |
| Abstract: | Antitrust authorities routinely rely on market concentration measures to assess the potential adverse effects of mergers on consumer welfare. Using a first-order approximation argument with logit and CES demand, I derive the relationship between the welfare effect of a merger on consumer surplus and the change in the Herfindahl-Hirschman Index (HHI). My results suggest that merger harm is correlated with the merger-induced change in HHI, and the proportionality coefficient depends on the price responsiveness parameter, market size, and the distribution of market shares within and across the merging firms. I present numerical validation of my formula along with an empirical illustration. |
| Keywords: | Merger, Herfindahl-Hirschman index, consumer surplus, upward pricing pressure |
| JEL: | D43 L13 L41 L44 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2025rwp-266 |
| By: | Martin Peitz; Anton Sobolev |
| Abstract: | A firm may decide to make total-surplus-reducing purchase recommendations in response to consumer heterogeneity in an experience good setting. First, we show under which conditions the firm chooses to make such biased recommendations in a monopoly setting. Second, we propose a duopoly model with differentiated products in which single-product firms compete in uniform prices and recommendation policies. We provide conditions under which both firms choose to bias their recommendations, whereas the bias would be absent if products were more differentiated or one of the two products were withdrawn from the market. |
| Keywords: | recommendation bias, recommender system, competition |
| JEL: | L12 L13 L15 D21 D42 D43 M37 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_715 |
| By: | Rapold, Ingo |
| Abstract: | This revised version corrects minor errors in the mathematical equations of the previous version (MPRA Paper No. [126467]). The theoretical argument and main conclusions remain unchanged. The paper examines quality uncertainty as a source of market failure and analyzes the resulting adjustment mechanisms and regulatory implications. This dissertation analyzes market failure under quality uncertainty and develops the goodwill approach as an alternative to signalling models in information economics. The study focuses on the existence of irreversible entry costs that arise endogenously from informational frictions rather than from explicit expenditures such as advertising or introductory pricing. The central idea is that new entrants in markets with incomplete consumer information cannot immediately sell their profit-maximizing output at the prevailing market price, because consumers initially lack sufficient trust in their product quality. As a result, newcomers must operate temporarily at higher average costs than established firms. Market entry therefore continues only as long as incumbent suppliers earn prices that at least compensate these initial cost disadvantages. In equilibrium, price premia for high-quality products persist even under free market entry. These equilibrium premia provide the incentive for established firms to maintain product quality: as long as the present value of future price premia exceeds the potential short-term gain from hidden quality deterioration, quality will be sustained. Non-cost-covering introductory prices or advertising expenses are not essential components of the goodwill model but represent optional instruments to reduce the irreversible costs of market entry. Beyond this theoretical contribution, the dissertation discusses the resulting implications for competition policy and regulation in markets characterized by persistent quality uncertainty. |
| Keywords: | Quality uncertainty; Goodwill; Market failure; Information economics; Asymmetric information; Reputation; Entry costs; Regulatory policy |
| JEL: | D82 H42 L15 |
| Date: | 2025–10–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126777 |
| By: | David P. Brown (University of Alberta); Andrew Eckert (University of Alberta); Douglas Silveira (Federal University of Juiz de Fora) |
| Abstract: | The extent of real-time information disclosure in electricity markets has been a longstanding debate. Regulators have the difficult task of striking a careful balance between transparency to improve market outcomes under uncertainty while limiting the potential for coordinated action. We consider the case of Alberta’s electricity market where, until 2017, firms observed anonymized price-quantity offers in the wholesale market in near-real-time. We empirically evaluate the role that this information played in improving firms’ abilities to forecast wholesale prices, a key argument raised by stakeholders for this information to be published. While we find that this information improved firms’ abilities to forecast wholesale prices under certain market conditions, we present evidence to suggest that the economic significance of this improvement is minimal. We point to other types of near-real-time information that could help improve expectations of future market outcomes and provide suggestions on information disclosure policies that aim to strike a balance on motivating efficient outcomes, while reducing the risk of coordination. |
| Keywords: | Machine Learning; Electricity; Price Forecasting; Competition Policy |
| JEL: | D43 L13 L50 L94 Q40 |
| Date: | 2025–10–26 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:021762 |
| By: | Papaevangelou, Charis |
| Abstract: | With the adoption of the Digital Services Act, Digital Markets Act, Artificial Intelligence Act, and European Media Freedom Act, the EU has set in motion an ambitious regulatory project to shape the governance of digital platforms and AI systems. This paper maps the governance stakeholders involved in the operationalization of these four instruments and examines their distribution of powers and responsibilities. Building on existing typologies of platform governance and regulatory space theory, we introduce an analytical framework that foregrounds three structural elements–competencies, capacities, and connectedness–alongside eight regulatory functions, ranging from agenda-setting to enforcement and discourse shaping. We then operationalize this framework in the context of the standardization ecosystem, highlighting the growing prominence of standardization bodies as central actors in multi-stakeholderism. Our analysis shows that, despite the promises of multi-stakeholderism for more democratic and cooperative governance configurations, in practice this approach often disregards material power asymmetries. This reality privileges technocratic expertise and industry stakeholders over public-interest actors, hindering ultimately a more equitable and democratic governance paradigm. We conclude by arguing that pursuing strategic autonomy, as the EU boasts, requires reducing the regulatory power of private actors and strengthening capacities of actors normatively and materially grounded in the public interest. |
| Date: | 2025–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:jbwau_v1 |
| By: | Aliza Racelis (University of the Philippines) |
| Abstract: | Artificial intelligence (AI) has profoundly changed and will continue to change our lives. AI is being applied in more and more fields and scenarios such as autonomous driving, medical care, media, finance, industrial robots, and internet services. The widespread application of AI and its deep integration with the economy and society have improved efficiency and produced benefits (Huang, Zhang, Mao & Yao, 2023). Concerns about AI's rapid evolution and potential dangers have led to the development of regulations in various regions. For instance, the EU has introduced the General Data Protection Regulation (GDPR) and the AI Act. The US has put forward the Blueprint for an AI Bill of Rights. In the case of the Philippines, its National AI Strategy Roadmap prioritizes innovation and ethical practices, addressing challenges like data quality and privacy (Alfiani & Santiago, 2024). AI-based research initiatives in Philippine agencies are anchored on the vision of improving and achieving better healthcare, economic growth, clean energy, smart cities, smart farming and mitigating climate change (Rosales et al, 2020).It appears that, across the globe, the primary considerations in formulating AI regulations include ethical principles, data privacy, algorithmic bias, transparency, explainability, and international collaboration. While the regulatory approaches differ across regions, they share a common goal: ensuring that AI benefits society while minimizing negative impacts (Alfiani & Santiago, 2024). AI regulations should typically be derived from AI ethics guidelines and principles, which may be summarized as follows: transparency, justice and fairness, responsibility and accountability, nonmaleficence, and privacy (Huang et al., 2023). In Asia, the ramifications of these ethical principles vary from country to country, depending on certain cultural and historical influences, e.g., Pancasila in Indonesia (the foundational state ideology), or the principle of fazhi or yifazhiguo in China ("government based on law" or "governing the country according to law?), and so on (Alfiani & Santiago, 2024). This paper reviews Philippine publications and conference papers on AI Regulations and Laws, and makes recommendations for a robust AI Law in the Philippines, having analyzed and learned from the worthwhile aspects of AI regulations in its Asian neighbors. |
| Keywords: | Artificial Intelligence, AI Regulations, Asia, Philippines |
| JEL: | M19 M10 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:15316558 |
| By: | Comisión Nacional de los Mercados y la Competencia (CNMC) (Comisión Nacional de los Mercados y la Competencia (CNMC)) |
| Abstract: | The port system is of great importance for the transport of goods and passengers both nationally and internationally, with implications for consumers and all productive sectors. To identify problems of efficiency and competition and make recommendations for improvement, this study examines the framework in Spain of the technical-nautical services of pilotage, towing and mooring and unmooring; the collection of ship-generated waste and cargo residues (or MARPOL) and the bunkering service. It is recommended, first, to improve the framework applicable to the provision of services, adapting the specifications and the mechanisms of concessions and licenses to a competitive approach, establishing appropriate incentives and considering the creation of an independent supervisor. Second, to promote a regime of competition in access to the pilotage service. Third, to promote competition in the towing service. Fourth, to make the provision of the collection of ship-generated waste and cargo residues service more flexible in terms of the waste and ports that can be selected to provide the service, defining the charges and the use of surpluses in a way that is appropriate for competition. Finally, a framework of transparency and competition in the fuel supply service is recommended. |
| Keywords: | Competition, Efficiency, Regulation, Pilotage, Towing, Mooring, Unmooring, Collection of ship-generated waste and cargo residues, Fuel supply, Ports |
| JEL: | K23 L43 L51 L92 R4 |
| Date: | 2025–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:awo:epaper:e/cnmc/004/24_eng |
| By: | Christopher Teh (Toulouse School of Economics, 31000 Toulouse, France & School of Economics,); Chengsi Wang (Department of Economics and Monash Digital Lab, Monash University) |
| Abstract: | This article critically examines recent economic theories on the relationship between startup acquisitions and innovation. We argue that the prevalence of killer acquisitions is likely overstated, even from a purely theoretical perspective. We further show that the entry-for-buyout effect may not always hold: relaxing merger control does not necessarily lead startups to invest more or pursue more disruptive innovation. Effective merger policy must adopt a dynamic perspective, balancing short-term competitive harms against long-terminnovation benefits. The article concludes with practical policy recommendations for the design and enforcement of merger control. |
| Keywords: | acquisition, innovation, merger policy, startup |
| JEL: | G34 L12 L41 O3 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2025-15 |
| By: | Parsons, Noah |
| Abstract: | The United States electrical grid faces unprecedented challenges from surging demand, cybersecurity threats, and climate-related disruptions. This paper presents a comprehensive strategic framework for grid modernization organized around three interdependent pillars: technological innovation and deployment, regulatory reform and workforce development, and strategic public-private partnerships. Drawing on comparative analysis of international approaches and synthesizing current policy gaps, we propose actionable recommendations including accelerated smart grid deployment, streamlined transmission permitting, mandatory cybersecurity standards, and domestic supply chain fortification. Our phased implementation strategy projects that achieving 80% renewable integration, 99.97% grid reliability, and elimination of foreign dependency for critical components is feasible within a ten-year horizon given appropriate policy support and investment frameworks. The framework positions grid modernization not merely as infrastructure renewal but as a strategic imperative for maintaining American industrial competitiveness and national security in the 21st century |
| Keywords: | grid modernization, energy security, renewable integration, cybersecurity, transmission infrastructure, industrial competitiveness |
| JEL: | F52 H54 L33 L51 L94 O33 O38 Q41 Q48 |
| Date: | 2025–10–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126569 |
| By: | Comisión Nacional de los Mercados y la Competencia (CNMC) (Comisión Nacional de los Mercados y la Competencia (CNMC)) |
| Abstract: | The port system is of great importance for the transport of cargo and passengers nationally and internationally, with implications for consumers and all productive sectors. This study examines the cargo handling and the passenger port services in Spain in order to identify efficiency and competition issues and make recommendations for improvement. It is recommended, first, to promote a transparent, efficient and pro-competitive institutional and regulatory framework, to strengthen the calculation of maximum charges and transparency, to establish incentives for efficiency, to update the Specific Terms and Conditions and to consider creating an independent supervisor. Second, for the cargo handling, it is recommended to facilitate access to the profession, to promote efficiency in the provision of workers through a regime based on direct hiring or temporary employment of workers, to promote automation, to strengthen the efficiency of the PIFs and to promote more competition in concessions. Finally, it is recommended to propose guidelines on the different models of operation of the passenger service. |
| Keywords: | Cargo, Passengers, Competition, Efficiency, Stowage, Concession, Terminal, Ports |
| JEL: | K23 L43 L51 L92 R40 |
| Date: | 2025–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:awo:epaper:e/cnmc/005/24_eng |
| By: | Jose, Anu (Central Bank of Ireland); Kelly, Jane (Central Bank of Ireland); King, Michael (Trinity College Dublin); McCarthy, Yvonne (Trinity College Dublin) |
| Abstract: | We study the behavioural effects of Buy Now, Pay Later (BNPL), a rapidly expanding form of consumer credit. Through an experiment conducted with a nationally representative sample in Ireland, we find that participants spend, on average, 4.39% more when using BNPL for purchases compared to debit cards. We demonstrate mental accounting effects where an inflated perception of available funds due to prior BNPL usage leads to a 22.2% higher likelihood of spending on a discretionary product. In parallel, we show the importance of anticipatory effects of such a credit innovation, whereby the mere expectation of future access to BNPL increases current debit card spending by 3.1%. While salient risk disclosures improve understanding of BNPL risks, they do not significantly affect usage or spending patterns. These findings highlight the dual psychological impact of BNPL on spending, support the rationale for consumer protection efforts, and establish the relevance of BNPL as a financial product of interest to macroeconomic policymakers. |
| Keywords: | Mental Accounting, Consumer Credit, Behavioural Finance, Deferred Payments. |
| JEL: | G4 G51 G41 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:15/rt/25 |
| By: | Mariam El Harras; My Abdelouhab Salahddine |
| Abstract: | Regulatory technology (RegTech) is transforming financial compliance by integrating advanced information technologies to strengthen anti money laundering and countering the financing of terrorism (AML CFT) frameworks. Recent literature suggests that such technologies represent more than just an efficiency tool; they mark a paradigm shift in regulation and the evolution of financial oversight (Kurum, 2023). This paper aims to provide a narrative review of recent RegTech applications in financial crime prevention, with a focus on key compliance domains. A structured literature review was conducted to examine publications between 2020 and 2024 with a thematic synthesis of findings related to customer due diligence (CDD) and know your customer (KYC), transaction monitoring, regulatory reporting and compliance automation, information sharing and cross border cooperation, as well as cost efficiency. Findings reveal that RegTech solutions give financial institutions more responsibility for detecting and managing financial crime risks, making them more active players in compliance processes traditionally overseen by regulators. The combined use of technologies such as artificial intelligence (AI), blockchain, and big data also generates synergistic effects that improve compliance outcomes beyond what these technologies achieve individually. This demonstrates the strategic relevance of integrated RegTech approaches. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.15764 |
| By: | Dong, Zeyang; Liang, Jing; Linn, Joshua (Resources for the Future); Qiu, Yueming |
| Abstract: | Many jurisdictions encourage households to adopt technologies that reduce greenhouse gas emissions and energy consumption, but there is little evidence on how these technologies affect the welfare of nonadopting households. We show that, in theory, adopting climate-friendly technologies that affect aggregate electricity demand, such as rooftop solar photovoltaics or electric vehicles, can increase or decrease average retail electricity prices in the short run; if the variable cost curve for electricity generation is sufficiently flat, higher demand reduces prices (and vice versa). Analysis of US residential electricity price and consumption data, as well as simulations of a computational electricity generation model, suggests that this variable cost condition holds. Adopting technologies that reduce consumption raises average retail prices, harming nonadopters; adopting technologies that increase electricity demand reduces average electricity prices, benefiting nonadopters. Using household survey data, we find that adopting rooftop solar disproportionately harms low-income nonadopting households, whereas adopting electric vehicles disproportionately benefits them. This progressivity roughly offsets the regressivity of the electric vehicle subsidy transfers. |
| Date: | 2025–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-25-28 |