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on Regulation |
| By: | Arnold, René; Schneider, Anna |
| Abstract: | Digital-choice architectures are increasingly engineered to exploit cognitive bias, calling into question the European Union's long-standing "average consumer" benchmark. While the forthcoming Digital Fairness Act (DFA) promises stricter limits on manipulative design, the empirical basis for calibrating those limits remains patchy. This study supplies a consumer-centric evidence base. A total of 95 German shoppers were interviewed. As part of the interviews, they completed real online-purchase journeys while thinking aloud; their verbalizations were analyzed following qualitative thematic coding principles. Two cross-cutting themes emerged. (1) Context is King: the same countdown timer or scarcity claim was either ignored or decisive depending on task urgency, fulfilment trust and device constraints, revealing vulnerability as episodic rather than categorical. (2) The Opportunistic Consumer: far from helpless, participants deployed a previously under-reported coping repertoire comprising aggressive filter pruning, platform loyalty, strategic delay and voucher recycling to realign interfaces with their own goals. These tactics typically neutralized low-stakes nudges but broke down against post-purchase "roach motels" that thwart cancellation of newsletters or unwanted user accounts. The findings advance theory and policy in three ways. First, they map dual-process psychology onto concrete shopping stages, showing that System-1 heuristics can insulate as well as expose users to dark patterns. Second, they complicate the binary average versus vulnerable consumer doctrine by documenting situational autonomy and deliberate rule-bending. Third, they outline a risk-tiered regulatory template for the DFA: benign, reversible nudges may remain permissible, whereas lock-ins and highstakes, irreversible manipulations warrant heightened duty-of-care and streamlined redress. By grounding legal benchmarks in the lived realities of digital commerce, the study provides actionable guidance for legislators, competent authorities and platform designers seeking a proportionate path to genuinely fair online markets. |
| Keywords: | Dark Patterns, Digital Fairness Act, Digital Services Act, Consumer Behavior, Cognitive Bias |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itse25:331252 |
| By: | Qiu, Bobing; Lin, Jiang; Duenas Melendez, Sergio |
| Abstract: | The sharp decline in the cost of solar photovoltaic (PV) technology has led to a dramatic increase in its global deployment over the past decade. In California, a pioneer in renewable energy adoption, solar generation has increased nearly ten-fold, creating significant challenges for grid integration—most notably exemplified by the so-called “duck curve.” This review examines the state’s evolving strategies for managing an increasingly solar-dominant grid in a cost-effective manner. We highlight two key strategies. First, with procurement mandates and rebate incentives, California has strategically invested in and expanded battery energy storage systems, enabling the capture and dispatch of excess solar power during peak net load hours as a cleaner and more flexible alternative to natural gas. Second, electricity interchange, through the real-time Western Energy Imbalance Market, has enhanced operational flexibility and supported more efficient solar integration in California. Despite this progress, long-term challenges remain for fully replacing the state’s natural gas generation with clean, dispatchable alternatives. |
| Keywords: | Physical Sciences and Mathematics, duck curve, renewables, electricity market, integration, battery storage |
| Date: | 2025–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:agrebk:qt34b106b2 |
| By: | Zhao, Tian (Department of Finance, College of Economics and Management, Hebei Agricultural University); Jamasb, Tooraj (Department of Economics, Copenhagen Business School) |
| Abstract: | Timely investment in capacity and fair pricing are critical for the development of infrastructure sectors and regulation plays a central role in their investment decisions and consumer welfare. Considering the natural monopoly characteristics of many infrastructure sectors and uncertainty in demand for new capacity, this paper develops a real options model to determine the optimal timing and capacity for anticipatory investments in infrastructure. We design a novel ex-ante regulatory framework to explore how perfect competition can serve as benchmark for regulating anticipatory investment in infrastructure under uncertainty. We compare optimal timing and capacity for anticipatory investment in infrastructure between the realistic monopoly model and an ideal competitive model. We show that our proposed price-cap regulatory model based on competitive benchmark would not only ensure timely investment in infrastructure but also spurs consumer participation by offering fairer access pricing and more capacity provision. This paper can serve as a reference for anticipatory investment in infrastructure development. |
| Keywords: | Investment decision-makings; Real options; Infrastructure; Market power; Perfect competition; Price-cap regulation |
| JEL: | C60 D40 L10 L50 Q40 |
| Date: | 2025–07–11 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2025_005 |
| By: | Bukur, Tamás |
| Abstract: | In the European Union, a heated debate has emerged about whether the current practice of network neutrality regulation might endanger the development of very high-capacity networks and thus threaten the competitiveness of the European telecommunications sector. Operators insist that large content providers, who are effectively free riding on operator infrastructure, should be required to contribute a "fair share" of the costs of delivering their content; they believe new policies should facilitate this. Yet in most policy discussions, "fairness" appears as a purely rhetorical concept, seldom accompanied by concrete methods of quantification. Many policy recommendations suggest that cost shares should be bargained by operators and content providers, and regulators should step in if negotiations are not successful. Although this paper does not take a position on either side of the debate, by employing a cooperative game-theoretic framework it seeks to clarify what "fair share" could mean in rigorous economic terms. My theoretical model builds on the externality created by content providers originating large volumes of internet traffic, who do not pay for and have no incentive to limit the resulting infrastructure costs. Central to our cooperative framework is the hypothetical "grand coalition, " in which all players (operators, content providers, and consumers) cooperate to maximize a joint surplus, thereby fully internalizing this externality. Hypothetical coalitions, including only part of the players, might also partially reduce it. Each coalition's value is defined in its ability to mitigate the externality, and each player's contribution to that mitigation provides a basis for allocating costs. I rely on the Shapley value to examine how operators, content providers, and consumers should share trafficgenerated costs under this widely used conception of fairness. My results suggest that, according to the Shapley value, operators and content providers should split costs equally, leaving no direct burden on consumers. In the case of multiple competing operators, their half of the cost should be further split between them equally. The model aims for ease of practical implementation; hence, the suggested share measures depend only on observable cost parameters. With such a cost-sharing regulation in place, and taken into account by players in their optimization, the market equilibrium shifts closer to the social optimum, infrastructure deployment rises, and at high infrastructure cost levels, both consumer surplus and total welfare improve. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itse25:331254 |
| By: | Chiha, Asma; Derveaux, Edward; Verbrugge, Sofie; Colle, Didier |
| Abstract: | The European Commission has initiated a consultation on the future of the telecommunications sector, including the contentious question of whether over-the-top content providers (OTTs) should contribute to the costs of network infrastructure investments. Current cost estimates attributing mobile network expenses to OTT traffic rely predominantly on top-down modeling, a method widely criticized for its oversimplification and lack of transparency. This study contributes to the debate by addressing three key questions. First, it challenges prevailing top-down estimates by applying a bottom-up cost assessment based on total cost of ownership (TCO), incorporating both CAPEX and OPEX. This approach follows a detailed network dimensioning phase, which models the required infrastructure according to key performance indicators (KPIs), user demand, and traffic forecasts. Second, it analyzes the traffic sensitivity of 5G cost categories using this bottom-up model. Third, the framework explores two approaches to allocating 5G deployment costs to OTT traffic: one based on proportional allocation of traffic-sensitive costs according to OTT traffic behavior, and another using an incremental cost model that attributes only the additional costs generated by OTT usage. The analysis draws on case studies from a dense urban region (Brussels-Capital Region) and a rural area (Marche-en-Famenne), yielding a Europe-wide weighted average. Results show that the bottom-up estimates (€0.46–€0.84 per subscriber per Mbps) are significantly lower than current top-down figures (€2.15–€2.30), indicating a substantial overestimation of OTT-related costs in prevailing assessments. Moreover, the assumption that non-traffic-sensitive costs are negligible does not hold in rural contexts. However, incremental costs associated with OTT traffic in urban 5G networks are significant enough to merit careful regulatory consideration. |
| Keywords: | bottom-up cost model, 5G network investments, network cost sharing, OTT traffic, traffic-sensitivity, incremental costs, fair share |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itse25:331260 |
| By: | Juan S. Mora-Sanguinetti; Cristina Peñasco; Rok Spruk |
| Abstract: | This paper analyses the effect of “green regulations” i.e. those aimed at mitigating the effects of climate change and environmental externalities, on innovation, using a novel regulatory database covering the period 2008 – 2022 for Spain. The database identifies regulations at both the national and regional levels through textual analysis. Employing a panel data approach, we assess how different types of environmental regulations—particularly those related to renewable energy—affect firm-level innovation activities. Our findings indicate that national level green regulations have a positive effect on innovation, whereas regional level regulations show mixed or negligible impacts. Importantly, the interaction between national and regional regulations, measuring the simultaneous production of legal texts at both levels can foster innovation but at a reduced pace with respect to the sole production of regulation at the national level. Given the results for regional-level regulation, our results provide evidence in favour of the hypothesis that regulatory fragmentation due to unequal, overlapping, inconsistent or conflicting procedure across jurisdictions may diminish these benefits. |
| Keywords: | Green Regulation, Innovation, Porter Hypothesis, Renewable Energy, Business |
| JEL: | K32 Q5 O44 O13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1016 |
| By: | Llorca, Manuel (Department of Economics, Copenhagen Business School); Rodriguez-Alvarez, Ana (Oviedo Efficiency Group, Department of Economics, University of Oviedo) |
| Abstract: | Energy poverty refers to the inability of households to afford adequate energy services, connected to negative impacts on health, well-being, and economic opportunities. It is a social policy issue that exacerbates inequality and limits access to essential services, particularly among vulnerable populations. In Spain, energy poverty has become an increasing concern, with many low-income households struggling to meet their energy needs despite various social protection mechanisms. This paper analyses the effectiveness of the Bono Social Eléctrico (BSE), a Spanish social electricity voucher aimed at alleviating energy poverty among vulnerable households. Departing from a microeconomic theoretical framework and a applying a Stochastic Frontier Analysis (SFA) approach, the study evaluates the gap between observed and potential energy poverty levels. The empirical analysis employs Spanish household panel data from 2021 to 2023, capturing key household characteristics and subsidy information. The findings indicate that, while the BSE contributes to reducing energy poverty, its impact is constrained by insufficient coverage of the poorest households and inefficiencies in allocation. The study suggests policy recommendations to enhance the voucher’s targeting mechanisms and explores strategies for more effective interventions to address energy poverty. |
| Keywords: | Energy poverty; Policy evaluation; Stochastic frontier analysis; Spain; Bono social eléctrico |
| JEL: | C23 D12 I38 Q48 |
| Date: | 2025–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2025_004 |
| By: | David Kurjak (Faculty of Business and Economics, Mendel University in Brno, Czech Republic) |
| Abstract: | This paper analyzes the effects of selected policy decisions and energy supply disruptions on electricity prices from 2015 to 2025. Announcements elicited modest, transitory movements. Realized disruptions such as armed conflict or interruptions to gas pipeline flows generated sharp and persistent price increases. Results indicate that electricity prices are highly sensitive to gas and carbon markets. These findings provide new evidence on the drivers of electricity pricing in integrated European markets. |
| Keywords: | electricity prices, event study, energy policy, carbon costs, natural gas prices, market integration |
| JEL: | C32 G14 Q41 Q48 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:men:wpaper:106_2025 |
| By: | Papathanasopoulos, Athanasios; Varoutas, Dimitris |
| Abstract: | This study evaluated the regulatory efficiency and performance of Over-the-Top (OTT) streaming platforms across ten European countries—France, Germany, Ireland, Netherlands, UK, Norway, Serbia, Greece, Italy, and Turkey—using a two-stage Network Data Envelopment Analysis (NDEA) framework. It also compared Europe to a global dataset that included countries from North America, South America, the Middle East & North Africa, and Asia-Pacific. The results from Stage revealed that European countries with modernized legislation, such as the UK, Germany, and France, demonstrated superior regulatory efficiency compared to those with outdated frameworks, such as Serbia. This highlighted the importance of up-to-date regulations, including net neutrality and data protection policies like GDPR, in fostering a strong regulatory environment. In Stage and the overall efficiency rankings (θoverall), the UK emerged as the top performer in Europe with a score of 0.5454, driven by its coherent regulatory framework, effective taxation policies, and robust market competition. Germany (0.5171) and Italy (0.4449) followed, benefiting from structured regulations and diverse OTT offerings. However, countries like Serbia (0.0484), Greece (0.1527), Ireland (0.1243) and the Netherlands (0.1710) lagged, reflecting inconsistencies in translating regulatory strengths into market success. Globally, Europe achieved a mean regulatory efficiency score of 0.7823, surpassing other regions in Stage 1 except North America, but its overall efficiency (θoverall = 0.3059) trailed North America (0.5631) and Asia-Pacific (0.3746). Europe's fragmented regulatory frameworks across countries and inconsistent implementation of taxation of international OTT platforms and OTT-specific policies hindered its ability to achieve unified market performance, despite its regulatory strengths. The findings underscored the need for European countries to adopt cohesive taxation frameworks for international streaming platforms, modernized OTT-specific regulations, and a more integrated regulatory approach to enhance the overall market efficiency. |
| Keywords: | OTT, OTT regulation, Network DEA, EU, Europe, Media policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itse25:331297 |
| By: | Fahlén, Per (Chalmers University of Technology, Gothenburg, Sweden); Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Nilsson, Mats (Södertörn University, Stockholm, Sweden) |
| Abstract: | We examine EU and UK plans for achieving a fossil-free energy system by 2050, centered on massive electrification and large-scale deployment of wind and solar power. Using empirical trends, cost analyses, and system-function assessments, we argue that current strategies underestimate real economic, technical, and social challenges. Three scenarios for meeting 2050 electricity demand are compared: full reliance on renewables; a 50/50 split between wind-solar and nuclear; predominantly nuclear. Evidence shows that higher shares of weather-dependent generation correlate with higher electricity prices, greater volatility, and increased system integration costs. High renewable shares require extensive backup, storage, and grid reinforcement, raising complexity and environmental impacts. Overlooked costs are highlighted: reduced capacity value, transmission expansion, balancing services, and social externalities. Sustainability must encompass environmental, economic, and social dimensions. A technologically diverse, dispatchable-power-based strategy—especially with expanded nuclear power— offers a more robust, cost-effective, and socially acceptable pathway to climate neutrality than a predominant reliance on intermittent renewables. |
| Keywords: | Climate change; Dispatchable electricity; Green transition; Mission-oriented policy; Renewable electricity; Rent seeking |
| JEL: | L26 L52 L70 O38 P11 Q48 Q58 |
| Date: | 2025–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1542 |
| By: | Haucap, Justus; Karacuka, Mehmet; Inke, Hakan |
| Abstract: | Utilizing Connor's International Cartel Database and employing difference-in-differences methodology, we find that market concentration, the number of buyers and cartel duration have significant impacts on cartel overcharges. We also find that the European Commission's 2006 guidelines on the method of setting fines for cartel infringements seems to have decreased cartel overcharges in the EU. In addition, the EU's cartel damages directive of 2014 (2014/104/EU) appear to have increased private damage payments. Overall, we find support that these two changes in EU competition policy have a reversing impact on the otherwise increasing trend of cartel overcharges, as making the infringement more costly at least in the EU. |
| Keywords: | Cartel fines, cartel damages, EU guidelines, competition law, antitrust |
| JEL: | L41 K21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dicedp:331876 |
| By: | Babolmorad, N.; Bossaerts, P.; Massoud, N. |
| Abstract: | Over 60% of younger retail investors rely on social media platforms like StockTwits for trading insights, displacing traditional investment advice and creating a new form of financial disintermediation. This paper provides a novel contribution by examining how investment advice diffuses through financial social networks and how professionals navigate these platforms in an attempt to avoid disintermediation. Using StockTwits data, we identify users whose messages go viral, so-called effective influencers, and assess how network structure and message content shape influence. We find that professionals strategically assert dominance, being 366% more likely than regular users to post viral messages, while avoiding partisan or emotionally charged content. Despite this influence, their activity declined sharply after 2018. We show that this decline was caused by intensified SEC and FINRA oversight. Unlike historical patterns - where regulatory reforms typically prompt gradual behavioral change if there is a change at all - the StockTwits case reveals a strong and immediate regulatory impact. Overall, the findings suggest that regulation rather than platform design or user behavior caused disintermediation in investment advice, with important consequences for how retail investors access and interpret financial advice. |
| Keywords: | Financial Social Networks, Retail Investors, Social Influence, Investment Advisors, Disintermediation of Investment Advice, Government Policy and Regulatory Over-reach |
| JEL: | D91 G23 G28 G50 |
| Date: | 2025–11–21 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2576 |
| By: | Mr. Flavien Moreau; Semih Üslü |
| Abstract: | We develop a search-based theory of mergers and acquisitions with heterogeneous firms and endogenous search complementarities. We use this model to understand how merger incentives and the firm size distribution interact. In equilibrium, search costs and entry rates determine search intensities and shape the distribution of market power. We derive the law of motion of the firm size distribution, provide closed-form solutions, and solve for endogenous search efforts. Finally, we derive the aggregate welfare function and show how our framework can be used to simulate the impact of various antitrust policies. In particular, antitrust policy can have large effects on welfare due to the existence of multiple equilibria. |
| Keywords: | Search; Bargaining; Mergers & acquisitions; Market power |
| Date: | 2025–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/239 |
| By: | Sen, Anupama (Smith School of Enterprise and the Environment, University of Oxford); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Toba, Natsuko (Energy Policy Research Group, University of Cambridge) |
| Abstract: | As the clean energy transition progresses, critical minerals and metals will be essential components in the deployment of clean energy technologies, with estimates of their demand set to soar. However, proven reserves, as well as processing facilities, are geographically concentrated in a small number of countries. This paper addresses the following research question: how will the emerging market structure for critical minerals develop: will producers and consumers compete, cooperate, or cartelise? We contribute to the literature by exploring frameworks to describe some possible outcomes of market evolution based on characteristics of the current critical mineral market, preconditions for competition, cooperation or cartelisation, and case studies. We draw on insights from collusive oligopolies in the international market for oil and gas. |
| Keywords: | Critical minerals; Energy transition; Supply chains; Decarbonisation; Industrial organisation; Cartels; Markets |
| JEL: | L13 O24 Q21 Q34 Q35 Q37 Q42 Q48 |
| Date: | 2025–07–11 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2025_006 |
| By: | Sukanya Kudva; Anil Aswani |
| Abstract: | We study the problem of auction design in the presence of bidder collusion. Specifically, we consider a multi-unit auction of identical items with single-minded bidders, where a subset of bidders may collude by coordinating bids and transferring payments and items among themselves. While the classical Vickrey-Clarke-Groves (VCG) mechanism achieves efficient and truthful outcomes, it is highly vulnerable to collusion. In contrast, fully collusion-proof mechanisms are limited to posted-price formats, which fail to guarantee even approximate efficiency. This paper aims to bridge this gap by designing auctions that achieve good welfare and revenue guarantees even when some bidders collude. We first characterize the strategic behavior of colluding bidders under VCG and prove that such bidders optimally bid shade: they never overbid or take additional items, but instead reduce the auction price. This characterization enables a Bulow-Klemperer type result: adding colluding bidders can only improve welfare and revenue relative to running VCG on the non-colluding group alone. We then propose a Hybrid VCG (H-VCG) mechanism that combines VCG applied to non-colluding bidders with a posted-price mechanism for colluding bidders, assuming access to a black-box collusion detection algorithm. We show that H-VCG is ex-post dominant-strategy incentive compatible (DSIC) and derive probabilistic guarantees on expected welfare and revenue under both known and unknown valuation distributions. Numerical experiments across several distributions demonstrate that H-VCG consistently outperforms VCG restricted to non-colluding bidders and approaches the performance of the ideal VCG mechanism assuming universal truthfulness. Our results provide a principled framework for incorporating collusion detection into mechanism design, offering a step toward collusion-resistant auctions. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.12456 |
| By: | Markus Brunnermeier; Jonathan Payne |
| Abstract: | This paper examines how digital payment ledgers operated by BigTech platforms and central banks can expand uncollateralized credit. However, policymakers face a trilemma-no system can simultaneously achieve efficient credit enforcement, limit rent extraction, and preserve user privacy. Monopolistic platforms enforce repayment but compromise privacy and extract rents; public or privacy-respecting ledgers protect users but weaken enforcement; platform co-opetition or programmable public ledgers balance enforcement and rents, but only by reducing privacy. |
| Keywords: | ledgers, platform money, CBDC, currency competition, private currencies, industrial organisation of payments, platforms, big tech, trilemma |
| JEL: | E42 E51 G23 L51 O31 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1306 |