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on Regulation |
| By: | David P. Brown (University of Alberta); Mar Reguant (Northwestern University) |
| Abstract: | This paper examines how the rapid expansion of wind and solar generation in Spain has reshaped wholesale electricity prices, ancillary service (AS) market costs, and market structure. Using an empirical strategy that exploits exogenous variation in renewable potential, we estimate how market outcomes would have differed under lower renewable capacity (and subsequently, renewable output). We find that rising wind and solar output substantially reduced wholesale prices. However, these reductions are partially offset by increases in AS market procurement and the associated operating costs driven by congestion and other operational challenges of variable generation. We show that while renewable growth reduces concentration in the wholesale market, AS markets remain highly concentrated, with limited scope for competition in key market segments. Our results highlight both the substantial net consumer benefits of renewable expansion on final prices (wholesale plus AS markets), while demonstrating the need for AS market reforms to reduce market concentration and cost-effectively manage increasing levels of renewable generation. |
| Keywords: | Electricity Markets; Energy Transition; Intermittency; Market Power |
| JEL: | L13 L50 L94 Q40 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:022362 |
| By: | Beknazar-Yuzbashev, George (University of Chicago); Jiménez-Durán, Rafael (Bocconi University, IGIER, Stigler Center, CESifo, and CEPR); Simonov, Andrey (Columbia University and CEPR); Stalinski, Mateusz (University of Warwick and CAGE) |
| Abstract: | Most digital platforms are funded through advertising rather than direct payments. Why? We argue that three main factors could explain this prevalence: users are more sensitive to monetary prices than to ad loads, microtargeting improves the match quality between users and ads, and platforms can personalize ad loads and thus price discriminate. We conduct a field experiment on Facebook with 1, 810 users who install a browser extension that (i) hides nearly all ads or (ii) replaces microtargeted ads with untargeted ones. We find that hiding 82% of ads increases time on the platform by only 6%, showing that users are highly insensitive to ad loads. Removing targeting sharply reduces ad clicks and long-run engagement, indicating that targeting increases the match quality between users and ads. Finally, two-thirds of ad-load variation occurs across users, consistent with ad-load discrimination. Counterfactual simulations indicate that an ad-funded model performs at least as well as a subscription model in terms of profits and delivers higher consumer surplus. The key mechanism is that users are much less sensitive to ad loads than to monetary prices, making advertising a relatively efficient revenue source. |
| Keywords: | social media platforms, online advertisement, user engagement, field experiment JEL Classification: |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:792 |
| By: | Antoine Dubus; Patrick Legros |
| Abstract: | Firms may share data to discover potential synergies between their data sets and algorithms, eventually leading to more efficient mergers and acquisitions (M&A) decisions. However, data sharing also modifies the competitive balance when firms do not merge, and a companymay be reluctant to share data with potential rivals. Under general conditions, we show thatfirms benefit from (partially) sharing data. By doing so, they can merge conditionally basedon high synergies. Compared to a laissez-faire situation, the presence of a regulator allowingor refusing the M&A may increase or decrease data sharing, with a concomitant increaseor decrease in consumer surplus. Hence, regulation can lower the surplus of consumers it iswilling to protect. We revisit the Google/Fitbit acquisition through the lens of this interplaybetween strategic data sharing and antitrust policy. |
| Keywords: | artificial Intelligence; Synergies; Mergers and Acquisition; incomplete Information; Antitrust |
| JEL: | G34 K21 L10 L21 L24 L50 L86 |
| Date: | 2026–02–05 |
| URL: | https://d.repec.org/n?u=RePEc:eca:wpaper:2013/403154 |
| By: | Benjamin T. Leyden |
| Abstract: | I study how third-party firms respond when a platform owner enters its own marketplace, analyzing Apple's entries into App Store submarkets from 2016-2021. Using text embeddings to define markets and a staggered difference-in-differences design, I find that Apple's entry deters new competitors and shifts incumbents' monetization strategies, but effects vary widely: many markets show no meaningful response, while others move in opposing directions across a host of monetization and quality outcomes. Responses depend on how Apple enters and apps' competitive proximity to Apple. This heterogeneity suggests targeted oversight rather than categorical restrictions on platform-owner entry. |
| Keywords: | digital marketplaces, platform-owner entry, app store, platform regulation |
| JEL: | L13 L86 L40 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12512 |
| By: | Riederle, Philipp (University of Oxford) |
| Abstract: | Users of centralised digital platforms (e.g., X, Instagram, TikTok) have little choice but to accept incumbent providers’ conduct or forgo participation. Digital platform interoperability is widely proposed as a remedy to reduce the economic and political power of centralised digital platforms by enabling user choice without sacrificing network connectivity. Despite its prominence in policy debates (e.g., EU’s Digital Markets Act, Art. 7), theoretical claims on its effects remain largely untested. This paper evaluates three theoretical expectations on platform interoperability: that it neutralises proprietary network effects; it facilitates individual user choice and switching; and that technical standardisation risks homogeneous services. To operationalise these concepts, this study analyses user switches within the interoperable social platform Mastodon. It draws on an unobtrusive, qualitative analysis of user posts documenting why individuals switched their interoperable providers. My findings qualify the theoretical promises and concerns: I find that interoperability is necessary but, on its own, insufficient to achieve the intentions associated with policy proposals. I identify practical obstacles such as incomplete implementation, information costs, and persistent switching costs that preserve proprietary network effects and that hinder individual choice and switching. Further, I challenge the concern of anticipated service homogenisation. I identify avenues of vertical (e.g., quality) and horizontal (e.g., governance values) provider differentiation. These avenues form an emerging research agenda on new dynamics between differentiated but interoperable platform providers. Overall, this study contributes the first empirical evaluation of digital platform interoperability, identifies obstacles, and formulates recommendations, speaking directly to policy. |
| Date: | 2026–02–18 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:6wsrq_v1 |
| By: | Davi-Arderius, Daniel (University of Barcelona and Chair of Energy Sustainability Barcelona Institute of Economics (IEB), Spain); Nepal, Rabindra (School of Business, Faculty of Arts, Society and Business University of Wollongong, Australia); Jamasb, Tooraj (Department of Economics, Copenhagen Business School) |
| Abstract: | Empirical studies of whether merchant arbitrage acts as a countervailing force to the "merit order effect" of solar and wind is important but unexplored in the Australian National Electricity Market (NEM). This study fills in this gap by studying the actual impacts of charging and discharging Battery Energy Storage Systems (BESS) on the day-ahead electricity spot prices. Australia is a global leader in BESS and the findings of this study are not only relevant to the ongoing reform of the NEM but also to other countries on the path to decarbonizing their energy mix. We use hourly data between 2024 and 2025, and a methodology based on an Autoregressive Moving Average (ARMA) model with Generalized Autoregressive Conditional Heteroskedasticity (GARCH) features. We find that BESS impacts on the spot-prices, but its impact is asymmetric: charging BESS has decreased the spot price, while discharging them has increased the spot price. We find positive welfare impacts from BESS when diesel generators are replaced, but not for other generation technologies. Some policy recommendations are provided based on the findings. |
| Keywords: | Electricity; Storage; Batteries; BESS; Australia; Arbitrage; GARCH |
| JEL: | L50 L94 Q28 |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2026_005 |
| By: | Leon Stolle; Jonas Boeschemeier; Benjamin F. Hobbs; Karsten Neuhoff |
| Abstract: | Locational marginal pricing (LMP) provides efficient locational dispatch and investment signals but requires a complementary congestion hedging instrument to function effectively. This paper investigates how exposure to locational price differences is managed in North American nodal electricity markets through the implementation of financial transmission rights (FTRs). Drawing on insights from 15 industry experts directly involved across all major North American electricity markets, we consolidate first-hand perspectives that reveal the practical complexities of FTR design and implementation. While most interviewees view FTRs positively, their experiences uncover multiple nuanced challenges to successfully design locational hedging instruments, which are often overlooked in the academic literature. As FTR design depends on market characteristics, we apply the findings to the European electricity market and discuss implications for a possible implementation of LMP in Europe. |
| Keywords: | Financial transmission rights, locational marginal pricing, nodal pricing, risk hedging, congestion revenue, electricity market design, contracts for differences |
| JEL: | D44 D47 L94 Q40 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2156 |
| By: | Scott Alan Carson; Scott A. Carson |
| Abstract: | The Environmental Protection Agency’s Quad-O regulation’s objective is to reduce methane emissions; however, its effects on industry output and international crude oil and natural gas prices remain poorly understood. Quad-O increased international prices for crude oil, natural gas, conventional gas, diesel, and aviation fuel, but did not produce uniform effects on firm returns across upstream, midstream, and downstream sectors. While the regulation’s implementation had limited effects on most firm returns, equipment & services and transportation & pipeline sectors experienced adverse returns following the Quad-O announcement. Although consumers faced higher energy prices, these sectoral return differential effects suggest that oil and gas consumers bore a larger share of the regulatory burden. |
| Keywords: | environmental protection agency, regulation, Quad-O, methane |
| JEL: | L50 L51 L52 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12446 |
| By: | Sébastien Houde; Tobias Wekhof |
| Abstract: | Minimum standard regulations for energy-using durables have long been suspected of having hidden costs: quality improvements in the regulated dimension reduce quality in other dimensions. We substantiate this claim for the U.S. clothes washer market, which has become a notorious example of the hidden cost phenomenon. We find that overall quality increased from 2001 to 2011, and these gains were primarily driven by improvements in energy efficiency. Quality in the non-energy dimensions declined or remained constant after the major standard change. These hidden costs, however, were quickly offset by energy-efficiency improvements in the new models. |
| Keywords: | minimum quality standard, hidden cost, energy efficiency regulations, appliance market, ex post analysis |
| JEL: | Q48 Q55 L51 L68 D12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12447 |
| By: | Davi-Arderius, Daniel (Càtedra de Sostenibilitat Energètica, Institut d'Economia de Barcelona, Universitat de Barcelona, Spain); Giovannetti, Emanuele (Faculty of Business and Law, Anglia Ruskin University, and Hughes Hall, University of Cambridge, UK); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School); Soroush, Golnoush (Independent Electricity System Operator (IESO), Canada) |
| Abstract: | The development of the Common European Energy Data Space (CEEDS) emerges as a pillar to enable secure, interoperable, trusted, and resilient data exchange among stakeholders of the European energy system. We study the potentials for the CEEDS from an energy infrastructure perspective. We focus on the improvement of operational processes, reducing barriers to entry and to data exchanges, utilising AI-driven analytics, new cross-sectoral processes, and flexibility. Recent innovative projects and solutions implemented, show promising and relevant potential for the implementation of the CEEDS in the energy sector. However, there are still not enough empirical analyses of the impact of real-life energy data space initiatives, which are essential for implementing these large-scale solutions. |
| Keywords: | Common European Energy Data Space; Energy Networks; Interoperability; Distributed Generation |
| JEL: | D40 L50 L90 Q40 |
| Date: | 2026–03–02 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2026_007 |
| By: | Nila S Khanolkar; Mr. David L Rozumek; Peter Windsor |
| Abstract: | The paper explores the role of financial sector regulators and supervisors with respect to climate risks; it discusses (i) the importance of adhering to core mandates and alignment with international standards; (ii) how existing regulatory and supervisory tools and approaches can be leveraged to address climate-related risks, outlining specifically the role of banking, securities and insurance supe rvisors; and (iii) considerations for supervisors in emerging market jurisdictions regarding capacity building. |
| Keywords: | regulation; supervision; regulator; supervisor; climate risks; climate; emerging markets; Monetary and Capital Markets Department; Financial Supervision and Regulation Division; IMF Library; views of the IMF; publication order; Climate change; Financial sector stability; Bank supervision; Global |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2026/001 |
| By: | Simon Porcher (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique, LSE - Department Mathematics [London] - LSE - London School of Economics and Political Science, LARGEPA - Laboratoire de recherche en sciences de gestion Panthéon-Assas - Université Paris-Panthéon-Assas, LAB IAE Paris - Sorbonne - IAE Paris - Sorbonne Business School) |
| Abstract: | Water is a complex issue—it encompasses the water cycle, water as a resource, and water as a public service. The water cycle is a common global good, while "blue" water is a shared local resource, requiring both global and local institutions for effective governance. This lecture explores the role of these institutions alongside key public service reforms like privatization, benchmarking, public ranking, and community-based management. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05503558 |
| By: | Steven Shavell |
| Abstract: | Although the obvious effect of settlement is to save litigants the costs of trial, settlement also influences deterrence—and for two reasons. First, because settlement is agreed upon by plaintiffs, it raises their expected return from litigation and thus the probability of suit. This augments deterrence. Second, because settlement is agreed upon by defendants, it lowers their expected costs of litigation and therefore dilutes deterrence. The primary objective of the article is to identify the net effect of settlement on deterrence and on social welfare in a model of accidents, liability, and litigation. The conditions for the bringing of suit in the model are not only that plaintiffs be willing to go to trial, but also that their anticipated settlements would exceed their pretrial costs. |
| JEL: | K13 K4 K40 K41 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34878 |
| By: | Luis Perez Garcia |
| Abstract: | Growing concerns about housing affordability have prompted the adoption of rent control policies and renewed debates over their effectiveness. This paper provides the first empirical evaluation of the 2024 rent control policy implemented in Catalonia under Spain's new national housing law. To identify the causal effect of the policy on the rental market, I use municipality-level administrative data and implement several difference-in-differences strategies and event study designs. The results point to a reduction in tenancy agreements and a less robust decrease in rental price growth. While the findings highlight important short-term consequences of rent control, they also underscore the need for caution due to data limitations and limited robustness in some estimates. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.08631 |