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on Regulation |
| By: | Mario Liebensteiner; Johannes Paha |
| Abstract: | Chronic electricity shortages constrain growth and welfare in many developing countries, where load shedding rations demand. Intermittent renewables can ease shortages, but their effects depend on how infeed timing aligns with scarcity. Using high-frequency data from South Africa and an instrumental-variables strategy, we estimate the effect of wind and solar generation on electricity rationing. On average, an additional MWh of wind generation reduces load shedding by 0.28 MWh, while an additional MWh of solar generation reduces it by 0.40 MWh. Wind provides a more robust reliability contribution across the day, including the evening peak, whereas solar benefits are concentrated in daylight hours. Our estimates permit a welfare-based evaluation of renewable investment. We show that the implied reliability benefits exceed benchmark investment costs by a wide margin and are complemented by sizeable climate and local air-pollution co-benefits. |
| Keywords: | load shedding, renewable energy, rolling blackouts, South Africa |
| JEL: | L94 O13 Q41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12540 |
| By: | Claude Crampes; Antonio Estache |
| Abstract: | The paper shows that the entry of data centers in the electricity market leads to priceand consumption effects observed in the real world that were quite predictable froma simple conceptual modelling exercise. The size of the associated welfare losses issensitive to specific electricity market characteristics, explaining why they are oftennot comparable across regions or countries. In general, the historical users are likelyto be worse off in the short run. They will recover their losses in the longer run, butonly if the entrant finances its own capacity needs and if the data centers do not haveexcessive bargaining power. The differences in possible outcomes according to contextsuggests that one-size-fits-all policies to manage the shock across countries or regionswill fail to mitigate undesirable effects in some contexts. |
| Keywords: | Data centers; Electricity; Pricing; Regulation; Incidence |
| JEL: | D63 L50 L16 L94 O33 Q41 Q48 |
| Date: | 2026–03–15 |
| URL: | https://d.repec.org/n?u=RePEc:eca:wpaper:2013/404324 |
| By: | Luca Macedoni; Ariel Weinberger |
| Abstract: | Do firms uniformly oppose regulations that increase production costs, or might industry leaders strategically support stricter standards as a competitive tool? We identify a specific mechanism through which large firms strategically support regulations to enhance their competitive position. Extending the Melitz-Chaney model of firm heterogeneity to incorporate government regulations and lobbying following Grossman-Helpman, we derive conditions under which regulations disproportionately burden smaller competitors while benefiting larger survivors through reduced competition. The model predicts that firm size is positively correlated with support for stringent regulations, but that larger sunk investments push firms to oppose such policies. To test these predictions, we develop a text-as-data approach using large language models to classify firm regulatory preferences from lobbying disclosures—a measurement challenge that has limited prior systematic analysis. Applying guided machine learning to over 20, 000 U.S. lobbying reports, we confirm that larger firms are significantly more likely to support stricter regulations, especially in concentrated industries. Capital-intensive firms with high leverage and less redeployable assets tend to oppose regulations, suggesting that operational flexibility is crucial for extracting strategic benefits from regulatory changes. |
| Keywords: | strategic lobbying, product standard regulations, firm heterogeneity, machine learning |
| JEL: | F12 D22 D72 L11 L51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12536 |
| By: | Johnen, Johannes (Université catholique de Louvain, LIDAM/CORE, Belgium); Shekhar, Shiva |
| Abstract: | This paper proposes a simple yet useful framework for evaluating vertical mergers in digital markets by distinguishing between product-specific and ecosystem-specific network effects. Vis-a-vis no network effects, product-specific network effects amplify foreclosure and steering incentives, as a rival’s growth directly undermines the platform’s product value. Conversely, ecosystem-specific effects dampen foreclosure incentives, since rivals contribute to the overall value of the platform ecosystem. We develop a formal model illustrating how this distinction shapes platform behavior and competitive outcomes. We apply this distinction to real-world examples to illustrate its potential usefulness. Our distinction implies that regulators may want to adopt a stricter standard with no presumption of efficiencies where product-specific effects dominate. In contrast, when ecosystem-specific effects prevail, merger evaluation should mirror traditional vertical merger analysis. Thus, offering a more nuanced approach to merger evaluation by presenting a practical screening tool to identify problematic vertical mergers in markets featuring network effects. |
| Keywords: | Network Externalities ; Platforms ; Vertical Integration |
| JEL: | L22 L41 L51 |
| Date: | 2025–07–30 |
| URL: | https://d.repec.org/n?u=RePEc:cor:louvco:2025015 |
| By: | Thibault Schrepel (Vrije Universiteit Amsterdam, Netherlands); Godefroy de Boiscuillé (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | This article questions the legal validity of the Digital Markets Act ("DMA") in light of its enforcement practice. Adopted on the basis of Article 114 TFEU as an internal market harmonization measure, the DMA is administered by the Commission as a standing regime of unilateral conduct control that operates alongside, and in close normative proximity to, Article 102 TFEU. The resulting functional equivalence between the two instruments raises structural doubts as to the DMA's compatibility with the constitutional framework of the Treaties. |
| Keywords: | Digital Markets Act; Article 102 TFEU; European Union law; Competition law; Digital platforms; Gatekeepers |
| JEL: | K21 K23 L40 L86 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2026-07 |
| By: | Simon Greenhill; Brant J. Walker; Joseph S. Shapiro |
| Abstract: | Projecting the effects of proposed policy reforms is challenging because no outcome data exist for regulations that governments have not yet implemented. We propose an ex ante deep learning framework that can project effects of proposed reforms by mapping outcomes observed under past regulations onto the legal criteria of proposed future policies (i.e., by “relabeling”). We apply this framework to study changes in jurisdiction of the US Clean Water Act (CWA). We compare our ex ante deep learning projection of jurisdiction under the Supreme Court’s Sackett decision against widely used projections from domain experts. Ex ante machine learning generates exceptional performance improvements over the leading domain expert model that the US Environmental Protection Agency currently uses, with 65 times more accurate identification of jurisdictional sites. We also develop an ex post deep learning model trained with data after policy implementation. Ex post deep learning performs best. Sackett deregulates one-third of all previously regulated US waters, particularly floodplains and pristine fish habitats, totaling 700, 000 deregulated stream miles and 17 million deregulated wetland acres. Deep learning can effectively project consequences of far-reaching regulatory reforms before they are implemented, when projections are both most uncertain and most useful. |
| JEL: | C45 D61 H11 H23 K32 Q25 Q53 Q58 R11 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34947 |
| By: | Gilbert Cette (NEOMA - Neoma Business School); Jimmy Lopez (LEDi - Laboratoire d'Economie de Dijon [Dijon] - UBE - Université Bourgogne Europe); Giuseppe Nicoletti (LUISS - Libera Università Internazionale degli Studi Sociali Guido Carli [Roma]); Océane Vernerey (LEDi - Laboratoire d'Economie de Dijon [Dijon] - UBE - Université Bourgogne Europe) |
| Abstract: | This article explores how regulations that restrict competition in key Canadian nonmanufacturing sectors such as energy, transport, trade, and professional services have contributed to the country's long-standing productivity gap with the United States. Using international data on anticompetitive regulations and productivity from 15 countries and a large number of industries over the 1996-2021 period, the study finds that regulation in these upstream sectors, which supply essential inputs to the rest of the economy, plays a role in shaping overall productivity performance. Taking results causally, a thought experiment suggests that if Canada were to implement an ambitious reform effort aimed at adopting best international practices in regulating these four sectors, GDP per capita could rise in the long term by between 6.5 and 10 percent, depending on the range of reforms implemented. Gains would originate from procompetitive reforms in all sectors, with the largest ones coming from the professional services and retail distribution. Overall, the findings highlight the major economic benefits Canada could reap from implementing a deeper and swifter pro-competitive reform agenda than in the past. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05446567 |
| By: | Luca Di Corato (Department of Economics, Ca’ Foscari University of Venice); Michele Moretto (Department of Economics and Management, University of Padova) |
| Abstract: | This paper studies a continuous-time regulatory problem in which a firm holds persistent private information about demand and is subject to a flow limited-liability constraint. The regulator regulates prices through a dynamic mechanism that ensures truthful reporting of the evolving type. Limited liability imposes a state-dependent lower bound on the firm’s instantaneous utility, inducing a reflecting boundary in continuation utility and giving rise to a tractable singular-control representation. We derive closed-form expressions for the optimal pricing rule and the associated continuation-utility function, and we characterize the optimal up-front transfer required to induce truthful revelation of the firm’s initial type. The resulting contract is fully explicit and highlights how limited liability shapes information rents and regulatory distortions over time. |
| Keywords: | Dynamic regulation, Limited liability, Adverse selection, Continuous-time contracting, Reflecting boundary, Singular control |
| JEL: | D82 D86 L51 H54 C61 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2026.09 |
| By: | Juan S. Mora-Sanguinetti (BANQUE DE FRANCE AND BANCO DE ESPAÑA); Cristina Peñasco (BANQUE DE FRANCE AND UNIVERSITY OF CAMBRIDGE); Rok Spruk (UNIVERSITY OF LJUBLJANA) |
| Abstract: | This paper analyses the impact 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 008-2022 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 findings 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: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2611 |
| By: | Keller, Clara Iglesias; Appelman, Naomi |
| Abstract: | Calls to ban digital technologies gained traction across liberal democracies, while similar measures in other contexts are portrayed as hallmarks of authoritarian governance. These bans rarely amount to complete prohibitions, appear in various contexts, and serve different political aims. We argue that, before engaging the normative question of legitimacy, regulatory scholarship must clarify what “technology bans” are. We propose a conceptual framework that understands technology bans primarily as regulatory discourse: narratives, justifications, and disputes that shape regulation. Drawing on discourse theory in public policy, we develop a typology of technology bans discourses, identifying three types: geopolitical measures, protection of vulnerable populations, and public interest bans. Our analysis demonstrates that they function as regulatory frames that communicate authority, sovereignty, and democratic control over technological development. By unpacking their discursive structure, the paper contributes to the understanding of technology bans as a regulatory category and to ongoing debates about technology governance and democratic legitimacy. |
| Date: | 2026–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3nhrj_v1 |
| By: | Cicilia Anggadewi Harun (Bank Indonesia); Safari Kasiyanto (Bank Indonesia); Camila Amalia (Bank Indonesia); Shinta Fitrianti (Bank Indonesia); Esha Gianne Poetry (Bank Indonesia); Nilasari (Bank Indonesia); Rina Megasari (Bank Indonesia); Naura Pradipta Khairunnis (Bank Indonesia) |
| Abstract: | This study examines and recommends regulatory and liability frameworks for the use of artificial intelligence in financial sector. Algorithmic bias, the black-box aspect of AI, data privacy concerns, and unequal treatment are the primary focus of this study. It employs normative, comparative, and empirical juridical analyses by assessing at AIrelated laws and cases, comparing AI governance models across jurisdictions, and undertaking focus group discussions with academics, industry stakeholders, and regulators. For the comparative analyses the study evaluates the regulatory models and AI-related cases in the European Union, the United States, Singapore, Australia, China, and Qatar. The result shows Indonesia should use a hybrid model that begins with an adaptive sandbox phase, moves toward a risk-based framework to balance innovation and responsibility, and subsequently transitioning to a co-regulatory model as AI utilization escalates. Additionally, considering that AI is a non-legal subject, the proposed Clear Box Liability framework puts a strong emphasis on human accountability through proportional liability principles. Furthermore, the FairSight Liability Model strengthens consumer protection, transparency, and effective dispute resolution in AI-driven financial services by integrating fairness and foresight. |
| Keywords: | Artificial Intelligence, AI Regulatory Framework, AI Bias, Consumer Protection, AI in Financial Services, AI Liability Framework |
| JEL: | A11 B11 C11 D11 F11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:idn:wpaper:wp202025 |
| By: | Océane Vernerey (LEDi - Laboratoire d'Economie de Dijon [Dijon] - UBE - Université Bourgogne Europe); Jimmy Lopez (UBE - Université Bourgogne Europe) |
| Abstract: | We investigate both the innovation and labor market effects of network sector regulation in a consistent framework. The estimated impact of regulation on the innovation process is based on the Community Innovation Survey and a system of equations modelling the firm's choice of R&D expenditure, propensity to innovate, and performance. We then examine the regulation and innovation impact on the labor market using the European Union Labor Force Survey. From a sample of 330, 604 firms and 8, 594, 055 individuals over the period 1998-2016 and five countries that have undergone important reforms (the Czech Republic, Hungary, Portugal, Slovakia and Spain), we find a strong negative effect of network regulation on firms' performance and individuals' employment probability. According to our estimates, the overall impact of the reforms implemented would be an average increase in the employment probability of 12.8%, almost entirely explained by an increase in firms' performance. |
| Keywords: | Employment, Innovation, Regulation |
| Date: | 2026–01–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05536453 |
| By: | Joshua D. Gottlieb; Sean Nicholson |
| Abstract: | We describe competition in the physician market, focusing on how entry barriers and substitution possibilities have changed in recent decades. Regulatory caps on medical school seats and residency slots—especially for high-paying specialties—continue to ration entry, generate high returns for those who gain these slots, and direct the most academically accomplished trainees toward lucrative fields. But trained physicians increasingly compete with nurse practitioners, physician assistants, and other mid-level practitioners in the market for patients. Training of these substitutes has expanded far more rapidly than physician supply. We present key facts about the physician pipeline, a conceptual framework linking specialty earnings to entry barriers, and describe the rise of mid-level providers. These facts mean that effective competition policy in physician markets must look beyond conventional concentration measures and focus on the institutions and laws that govern who can provide medical care. |
| JEL: | I11 J44 L13 L50 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34955 |
| By: | Wei Cai; Andrea Prat; Jiehang Yu |
| Abstract: | Incomplete contract theory, supported by anecdotal evidence, suggests that when a firm is acquired, workers may be adversely affected in non-contractible aspects of their work experience. This paper empirically investigates this prediction by combining M\&A events from the Refinitiv database and web-scraped Glassdoor review data. We find that: (a) Controlling for pre-trends, mergers lead to lower satisfaction, especially on non-contractible dimensions of the employee experience (about 6% of a standard deviation); (b) The effect is stronger in the target firm than in the acquiring firm; (c) Text analysis of employee comments indicates that the decline in satisfaction is primarily associated with perceived breaches of implicit contracts. Our findings indicate that mergers may reduce workers' job utility through non-monetary channels. |
| JEL: | D23 G34 J31 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34920 |
| By: | Houtgraaf, Glenn; Weißmüller, Kristina Sabrina (Vrije Universiteit Amsterdam) |
| Abstract: | Rules are central to the functioning of public bureaucracies, yet public servants often experience formalization as both enabling and constraining. While functional rules support fairness, efficiency, and integrity, dysfunctional formalization—or red tape—obstructs effective service delivery. This study explores how public servants cope with this tension by investigating how public service motivation (PSM) and pragmatic creativity shape their likelihood to bend rules for prosocial reasons. Advancing the ability-motivation-opportunity model of behavior under discretion, this study presents novel evidence on the antecedents of the moral justifications for rule-bending behavior based on data from a vignette-based quasi-experiment among Dutch civil servants. Findings show that pro social rule-bending is driven by PSM’s self sacrifice dimension, whereas rule-bending for self-serving purposes is driven solely by pragmatic creativity. These insights advance understanding of rule-bending as a morally contingent form of bureaucratic discretion and inform integrity management, recruitment, and public personnel policies on how contextual justifications influence this behavior. |
| Date: | 2026–03–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3sdw2_v1 |