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on Regulation |
| By: | Georgios Gatsios; Christos Genakos; Stella Papadokonstantaki |
| Abstract: | We examine the short-run impact of price ceilings on retail gasoline prices in isolated oligopolistic markets, uniquely observing for which stations the regulation was binding and for which it was not. Leveraging daily pricing data and a difference-in-differences methodology, we find that, while binding stations naturally lowered prices, non-binding stations increased theirs, though there is substantial heterogeneity. Among non-binding stations, those with more favorable characteristics for collusion adjust prices faster, move closer to the ceiling, and exhibit lower price dispersion, consistent with more effective coordination. Our results provide evidence that the price ceiling acted as a focal point for collusion among non-binding stations, consistent with channels identified in tacit collusion theory. |
| Keywords: | price ceiling, tacit collusion, focal point, retail gasoline markets, oligopoly |
| Date: | 2026–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2169 |
| By: | Klein, Gordon J.; Klotz, Phil-Adrian; Paha, Johannes |
| Abstract: | This study provides an empirical assessment of whether competition stimulates infrastructure investment within network industries – an issue that remains unresolved through theoretical approaches alone. We examine this question in the context of fiber-optic broadband deployment by internet service providers in Germany, a sector that has drawn regulatory scrutiny amid concerns that incumbent firms engage in strategic duplication of infrastructure to deter market entry. To this end, we construct a novel dataset by applying text mining techniques to systematically extract information on fiber infrastructure duplication from newspaper reports. Employing econometric methods, we estimate the causal impact of competition on investment behavior. Contrary to the expectation that competition may spur infrastructure expansion, our findings indicate that competitive pressure is associated with a deceleration in fiber network rollout. |
| Keywords: | Fiber Rollout, Infrastructure Competition, Telecommunication |
| JEL: | D22 L52 L86 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:atv:wpaper:2601 |
| By: | Simon Finster; Bernhard Kasberger; Simon R\"utten |
| Abstract: | In European day-ahead electricity markets, carbon allowance costs passed through by marginal fossil plants raise consumer expenditure and generate inframarginal rents for non-emitting generators. We propose a settlement modification: when the zonal day-ahead price exceeds a threshold, non-emitting generation is remunerated at the clearing price minus a fixed CO2 proxy deduction, while all other units continue to receive the uniform price. The mechanism thus reallocates a part of the inframarginal rents to consumers. Using hourly data we estimate static average expenditure reductions of about 8.5% in Austria and 4.7% in Germany in 2025. We discuss bidding incentives around the threshold, interactions with Contracts for Difference, implementation in coupled bidding zones, and a gas-cost variant for the 2022 energy crisis. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.25874 |
| By: | Khaw, Rachel (Monash University) |
| Abstract: | This thesis develops a theoretical model of digital platform competition in which moderation choices endogenously generate ideological differentiation. Competing platforms decide which content providers to host, trading off advertising revenues against moderation costs, while consumers sort by ideological proximity and content variety. In equilibrium, breadth competition cancels out, leaving ideological tilt as the key dimension of differentiation. Polarisation emerges as the most robust equilibrium, maximising platform profits but welfare-reducing for moderates, while generalism is socially optimal but privately fragile. By modelling ideology as the outcome of moderation intensity rather than an exogenous stance, the paper clarifies how moderation incentives shape polarisation, welfare, and regulatory trade-offs. |
| Keywords: | Digital platforms ; content moderation ; ideological differentiation ; polarisation ; welfare ; industrial organisation. JEL classifications: L13 ; L82 ; D43 ; D72 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:wrkesp:98 |
| By: | Pablo Blanchard (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Sebastián Fleitas (Pontificia Universidad Católica de Chile); Rodrigo González Valdenegro (Charles River Associates) |
| Abstract: | We study the equilibrium welfare effects of using state-owned enterprises (SOEs) to discipline market power. We estimate a dynamic equilibrium model of Uruguay’s individual capitalization pension system, where a high-quality SOE competes with private firms in the presence of worker inertia. We find that the presence of a SOE lowers equilibrium fees and increases investment returns. Replacing it with a private firm would more than double its fee and raise private firms’ fees by 8 percent. Reducing inertia mitigates but does not offset privatization. Comparing policy instruments, we show that direct price regulation yields higher welfare gains than competition through an SOE. |
| Keywords: | competition, state-owned firms, pension funds, regulation |
| JEL: | L51 N2 H4 L21 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ulr:wpaper:dt-03-26 |
| By: | Ertian Chen; Lichao Chen; Lars Nesheim |
| Abstract: | The European Union Emissions Trading System is set to substantially increase the effective carbon price faced by airlines. To quantify the impact of this carbon regulation on the European airline industry, we estimate a two-stage model of airline competition with endogenous route entry, flight frequencies, and pricing using European data on market shares and prices. Counterfactual simulations reveal that the impacts of carbon pricing are highly asymmetric across carrier types and market segments. Consumer surplus declines by up to 25% overall, with medium-haul markets bearing the brunt at up to 90%, while short-haul markets experience positive net welfare gains (including carbon revenue and the social value of avoided emissions) as airlines reallocate capacity toward shorter routes. We find that airline profits decline by 8-45% across scenarios, while carbon tax revenue of $0.9-3.1 billion and a social value of avoided CO2 emissions of $0.5-1.4 billion partially offset the welfare losses. We also show that a hypothetical Wizz Air-Ryanair merger primarily benefits firm profits through network expansion synergies. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.27724 |
| By: | Louis-Daniel Pape (ECO-Télécom Paris - Equipe Eco Economie - CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique); Michelangelo Rossi (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper studies the impact of the European Union (EU) Digital Markets Act (DMA) on user search behavior and traffic to online mapping services, focusing on recent changes to Google's search results page. In January 2024, Google altered the display of location-based queries for EU users by removing clickable maps and direct links to Google Maps. We exploit this policy-induced change and implement a difference-in-differences design comparing EU and non-EU countries to assess how the removal of Google's self-preferencing shaped search volumes and traffic patterns. Search queries for maps and Google Maps increased by more than 21%. Although the former may reflect broader interest in mapping services, the latter directly signals intent to use Google Maps. Yet, this surge in searches primarily redirected users back to Google Maps. Traffic data reveal no significant change in overall visits to www.google.com/maps on desktops or mobile devices. Instead, we observe shifts in the channels through which users access the service and in session duration. No corresponding increase in search activity or traffic is observed for Bing Maps nor for other competing mapping services. These findings indicate that the DMA had weak competitive effects, highlighting Google Maps' dominance in a market where alternatives remain limited. |
| Keywords: | Self-preferencing, Digital Platforms, Online Search, Digital Markets Act, Google Maps |
| Date: | 2026–01–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05564479 |
| By: | Ahmed Mohamed (G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Rémy Rigo-Mariani (G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Vincent Debusschère (G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes) |
| Abstract: | The revenues of battery energy storage systems (BESS) participating simultaneously in different markets such as energy and primary reserve has been widely investigated. In most cases, the system profitability is evaluated with optimization approaches based on historical data for prices and frequency measurements. However, in actual operations, the revenue decreases from such an ideal scenario due to uncertainties and the potential impossibility to fulfill the commitments, which translates into economic penalties. This paper proposes two-stage management strategies of a BESS participating in day-ahead and primary frequency reserve markets. The first stage consists in a day-ahead optimization of the quantities for the energy traded and capacity reserved and is based on simple forecasts. Heuristics strategies are then investigated for the real-time phase, based on actual frequency measurements at 10 seconds. Simulations are performed for data in the French market along 2021 and results obtained show that the proposed management can reach up to 90 % of the theoretical optimum profits obtained with perfect forecasts and optimal control. Especially, the real-time operation limits the penalties due to the impossibility to provide reserve when committed. Lastly, a degradation analysis of the BESS over 10 years shows that ageing remains moderated under 20 %. |
| Keywords: | battery degradation, price uncertainty, frequency reserve, bidding strategy, Energy markets |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05565320 |
| By: | Kamlage, Jan-Hendrik; Rogall, Marius; Sasse, David; Mohr, Kim |
| Abstract: | Der Ausbau der Stromübertragungsnetze spielt im Rahmen der deutschen Energiewende eine zentrale Rolle, aber führt in den betroffenen Kommunen regelmäßig zu Konflikten. Die Übertragungsnetzbetreiber (ÜNB) setzen auf informelle Formate der Stakeholderbeteiligung, um die Akzeptanz und Legitimität der Stromleitungsprojekte zu fördern. Diese informellen Beteiligungsprozesse haben die ÜNB in den letzten 15 Jahren kontinuierlich weiterentwickelt. Ziel des Beitrags ist es, diese Entwicklung kritisch zu beleuchten. Der Beitrag zeigt auf, wie sich frühe experimentelle und dialogorientierte Ansätze zu zunehmend professionalisierten und standardisierten, kampagnenartigen Beteiligungsformaten entwickelt haben. Während diese Praktiken die Transparenz und Akzeptanz von Planungsverfahren und der ÜNB als Projektentwickler erhöhen, bleibt ihr Einfluss auf die Akzeptanz der Infrastrukturprojekte selbst begrenzt. Auf der Grundlage dieser Analyse identifiziert der Beitrag fünf strukturelle Hindernisse – ungleiche Verteilung von Lasten und Nutzen, hohe Komplexität und Ressourcenknappheit, begrenzte lokale Entscheidungsbefugnisse, die Doppelrolle der ÜNB sowie lokal spezifische Akzeptanzkonstellationen –, die die Wirksamkeit informeller Beteiligung systematisch einschränken. Abschließend plädiert der Beitrag für einen systemischen und kontextsensitiven Ansatz für die lokale Governance der Energieinfrastruktur. The expansion of electricity transmission grids plays a central role in Germany’s energy transition, but regularly leads to conflicts in the local communities affected. Transmission system operators (TSOs) rely on informal forms of stakeholder engagement to promote acceptance and legitimacy of power line projects. The TSOs have continuously refined these informal engagement processes over the last 15 years. The aim of this paper is to critically examine this development. It demonstrates how early experimental and dialogue-oriented approaches have evolved into increasingly professionalised and standardised, campaign-style participation formats. Whilst these practices enhance the transparency and acceptance of planning procedures and of the TSOs as project developers, their influence on the acceptance of the infrastructure projects themselves remains limited. Based on this analysis, the paper identifies five structural barriers – unequal distribution of costs and benefits, high complexity and resource scarcity, limited local decision-making powers, the dual role of the TSO, and locally specific acceptance constellations – which systematically limit the effectiveness of informal participation. In conclusion, the paper advocates a systemic and context-sensitive approach to the local governance of energy infrastructure. |
| Date: | 2026–03–24 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:8e34r_v1 |
| By: | Zi Yang Kang |
| Abstract: | This paper revisits the classic instrument choice problem in a setting with consumption externalities, through the lens of robust mechanism design. A regulator can implement any incentive-compatible policy but is uncertain about how individual demand is correlated with marginal externalities, and evaluates policies by worst-case welfare. The optimal policy is a quantity control: a floor for positive externalities and a ceiling for negative externalities. If the sign of the correlation is known, a uniform tax or subsidy can be optimal. The framework also applies to regulatory uncertainty and costly screening, providing a welfare-based explanation for the prevalence of non-price policies. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.15832 |
| By: | Markiewicz, Zuzanna (University of Warwick) |
| Abstract: | This study examines whether the 2013 FAA First Officer Qualifications (1, 500-hour) rule reshaped competitive dynamics across U.S. legacy and regional carriers, measured by group-level mean changes in offered seat capacity relative to Mexican and Canadian carriers outside the rule’s jurisdiction. Triple-Difference and Difference-in-Differences models are estimated on an airport-pair–carrier–month–year-level data on passenger flights on bidirectional U.S.–Canada and U.S.–Mexico routes market from 2012 to 2014. On average, post-policy, the U.S. legacy–regional capacity gap in offered seats widened by 46% relative to the corresponding foreign legacy–regional gap. U.S. regional carriers reduced offered seats by 19% relative to foreign regional carriers, while U.S. legacy carriers increased offered seats by 34% relative to foreign legacy carriers. Overall, the safety-oriented tightening of pilot-qualification requirements appears to have produced unintended competitive spillovers with asymmetric effects, consistent with wage-sensitive U.S. regional airlines curtailing operations and larger-scale U.S. legacy carriers gaining market power. |
| Keywords: | 1, 500-hour rule ; pilot qualification requirements ; labour supply constraints ; airline competition ; regulatory asymmetry JEL classifications: L93 ; L51 ; L13 ; J44 ; R48 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:wrkesp:97 |
| By: | Yassine Lefouili (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse); Leonardo Madio (University of Padova, Padova, Italy.) |
| Abstract: | In this paper, we review recent studies on the impact of mergers on investments. We begin by examining how mergers among competing incumbents inf luence firms' incentives to develop new products and undertake cost-reducing or quality-enhancing investment. We then analyze how an incumbent's acquisition of an innovative entrant affects the investment incentives of both parties. Next, we discuss the effects of vertical mergers on the investment decisions of both upstream and downstream firms. Finally, we highlight several policy-relevant insights from the literature and suggest directions for future research. |
| Keywords: | Entry, Mergers, Innovation, Investment, Competition |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05543677 |
| By: | Lars Winkelmann; Wenying Yao |
| Abstract: | This paper examines how regulatory interventions in high-frequency financial markets affect price discovery. We focus on Breaking news, where dynamic circuit breakers trigger trading halts immediately after the release of macroeconomic fundamentals. Within a high-frequency signal-in-noise model, we show that triggering rules complicate statistical inference for the price impact of news, rendering conventional non-parametric jump estimators inconsistent. Building on this insight, we develop a regression-based test for fundamental pricing that accounts for non-vanishing transition times. The test compares transition price changes to efficient jumps implied by observable factors. Our empirical analysis of CME E-mini S\&P 500 futures shows that Breaking news are associated with systematic deviations from fundamental pricing, predominantly in the form of overshooting. Our findings highlight a regulatory trade-off: the appeal of simple and transparent circuit breaker rules must be weighed against their cost of preventing fundamentals from being priced contemporaneously, thereby creating adverse incentives and introducing distortions. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.22835 |
| By: | Duseja, Sushil |
| Abstract: | Existing AI governance instruments provide essential foundations for oversight, with strong capabilities for harms that can be detected, bounded, attributed, and substantially remediated after the fact. This paper examines how that architecture can be further specified for three categories of AI-mediated outcome where restorability can fail under identifiable conditions: epistemic contagion through synthetic misinformation, reputational destruction via AI-generated defamation, and structural labor displacement driven by automation at scale. Through comparative regulatory analysis of four core Euro-Atlantic frameworks (the EU AI Act, the NIST AI RMF, the UK White Paper, and the OECD incident-reporting framework), with the G7 Hiroshima Code used as an interoperability reference, the paper identifies an opportunity for additional operational specification: an explicit threshold for the point at which remediation should be complemented by additional ex ante safeguards. It proposes the Systemic Irreversibility Baseline as that complementary layer. The Baseline routes responses along distinct tracks: standard remediation for restorable product-side harms, strict liability for localized irreversible product-side harms, precautionary technical architecture for systemically irreversible productside harms, and macroeconomic transition policy for intended-utility displacement. Four design mandates operationalize the precautionary track: traceable human oversight, auditable uncertainty thresholds for bounded decision tasks, epistemic user-interface friction, and contentprovenance infrastructure. Throughout, "effectively irreversible harm" denotes harm for which restoration to functional equivalence is not feasible within governance-relevant time horizons. The contribution is a governance design framework grounded in existing empirical literatures and comparative legal analysis, intended to complement current regulatory systems rather than replace them. |
| Date: | 2026–03–25 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:g3rnj_v1 |
| By: | Jan K. Brueckner; Ricardo Flores-Fillol |
| Abstract: | This paper estimates passenger benefits from airline flight frequencies, recognizing that this task is less straightforward for connecting trips than for nonstop travel. In doing so, the paper joins Yuan and Jia (2026) as the only other study in the literature that confronts the problem of creating a flight-frequency measure for connecting trips. With airlines providing a crucial service in modern economies, the ability to measure the quality of that service is essential, not just for the nonstop service that links larger cities but for the connecting trips involving smaller endpoints that many passengers rely on. |
| Keywords: | flight frequency, benefits, airline service quality |
| JEL: | L15 L93 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12571 |