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on Regulation |
| By: | Pittman, Russell |
| Abstract: | Reform and restructuring of state-owned monopoly freight railways have generally followed one of two strategies. Each has had some success, but the European model of competing train operating companies over a monopoly track has suffered from a lack of reliable infrastructure funding, while the Americas model of competition among vertically integrated railways has suffered from the difficulty of protecting “captive” shippers. This paper proposes a third option that arguably addresses the weaknesses of both models: the “competitive rules joint venture” already observed in US, Canadian, and Mexican port and belt railroads. |
| Keywords: | Freight railways; restructuring; competition; infrastructure financing |
| JEL: | L51 L92 R42 |
| Date: | 2026–04–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128816 |
| By: | Leonardo Bursztyn (University of Chicago & NBER); Angela Duckworth (University of Pennsylvania); Rafael Jiménez-Durán (Bocconi University, IGIER, CEPR, CESifo, & Stigler Center); Aaron Leonard (University of Chicago); Filip Milojević (University of Chicago); Christopher Roth (University of Cologne, ECONtribute, NHH Norwegian School of Economics, MPI for Behavioral Economics, & CEPR); Cass R. Sunstein (Harvard Law School) |
| Abstract: | In December 2025, Australia became the first country to ban youth under 16 years old from holding accounts on major social media platforms, a policy now under consideration in more than a dozen countries and in numerous states. Because social media use is inherently social, the effectiveness of a ban that is easy to circumvent may depend on whether compliance reaches a tipping point: a share of compliant peers high enough to make it optimal for individuals to comply themselves. We surveyed 746 Australian teenagers four months after the ban took effect and find that only about one in four 14–15-year-olds comply. The social environment around use has barely moved: most banned teens believe that their peers are still using banned platforms and cite social reasons for continuing use. Sustaining high compliance requires two ingredients: the share of compliers must be high enough and those who comply must find it preferable to continue complying. The current ban achieves neither. Teenagers report that they require roughly two-thirds of peers to stop using social media to stop themselves, far above the share currently complying. They also perceive compliers as less popular than non-compliers, so the more influential teens disproportionately stay on the platforms. Together, these patterns suggest that compliance is more likely to diminish than to rise. Sustaining higher compliance will likely require pairing the ban with instruments that act on social norms and individual incentives directly. |
| Keywords: | Social media ban, tipping points, coordination, compliance, network effects, peer effects, social norms, adolescents, technology regulation, Australia |
| JEL: | D85 D91 I18 L51 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:406 |
| By: | Yukihide Kurakawa (Kanazawa Seiryo University) |
| Abstract: | This study theoretically examines how electricity market structure affects total emissions. We define emissions attributable to imperfect competition, relative to a perfectly competitive benchmark. Im- perfect competition in the electricity market reduces emissions from electricity generation; however, higher prices discourage electrification in end-use sectors and increase the direct use of fossil fuels. When the emission factor of electricity is below a certain threshold, higher prices associated with imperfect competition lead to higher total emissions, whereas the effect reverses when the emission factor exceeds the threshold. This threshold can be indirectly identified through changes in electricity consumption under a carbon tax. These findings indicate that pro-competitive policies can reduce total emissions if (and only if) the emission factor of electricity is sufficiently low; otherwise, they may increase total emissions. Moreover, the emission reduction effect of such policies becomes even stronger as the electricity emission factor decreases. |
| Keywords: | electricity market structure, imperfect competition, electrification, carbon tax, total emissions |
| JEL: | D40 L13 L94 Q42 Q50 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:was:dpaper:2601 |
| By: | Simeon Djankov; Edward L. Glaeser; Andrei Shleifer |
| Abstract: | What determines whether and how regulations are reformed? We use a newly constructed data set of 3, 590 successful and failed regulatory reforms in 189 countries, between 2005 and 2022, to address this question. We document that regulations have become more business friendly in some regulatory domains but not others. We also show that regulations are more business friendly in richer than in poorer countries, and that holding initial regulatory levels constant, richer countries also reform more. We present a model in which the successful passage of reforms is shaped by the number of veto points in the approval process, the social returns to reform, and the cost of compensating losers from reform, and then test it using our new data set. We find that richer countries have both higher reform attempt and success rates, but less impact of individual reforms on regulation than poorer countries. These findings are consistent with the model if richer countries are better at reform, perhaps because they can compensate losers more efficiently. Across the world, reform attempt rates are strongly correlated with reform success rates but not with reform impact levels. Within countries, a higher share of technological reform attempts is successful, compared to administrative or legal reforms, consistent with the importance of veto points. |
| JEL: | H10 H11 K20 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35119 |
| By: | Volker Nocke; Nicolas Schutz |
| Abstract: | We develop a potential games approach to study multiproduct-firm pricing games.We introduce the new concept of transformed potential and characterize the classes of demand systems that give rise to pricing games admitting such a potential. The resulting demand systems may contain nests (of closer substitutes) or baskets (of products that are purchased jointly), or combinations thereof. These demand systems allow for flexible substitution patterns, and can feature product complementarities arising from joint purchases and substitution away from the outside option. Combining the potential games approach with a competition-in-utility approach, we derive powerful results on existence of pure-strategy Nash equilibria. |
| Keywords: | Multiproduct firms, potential game, oligopoly pricing, complementary goods, joint purchases, nests, equilibrium existence, equilibrium uniqueness |
| JEL: | L13 D43 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_644_v3 |
| By: | Canta, Chiara; Madio, Leonardo; Mantovani, Andrea; Reggiani, Carlo |
| Abstract: | Online platforms connecting physicians and patients are increasingly com-mon and often operate in heavily regulated contexts. We consider a platform that provides cost-reducing services for physicians and quality-enhancing ser-vices for patients. The platform also improves the matching between patients and physicians, thereby increasing competition among the latter. When prices are unregulated, physicians charge different prices online and offline, yet not all join the platform, which is suboptimal in terms of social welfare. The platform may also under- or over-invest in the quality level offered to patients, making their participation suboptimal as well. We then analyze price regulation. Un-der a single regulated price for medical visits, regardless of the booking channel, all physicians join the platform. However, the first-best allocation cannot be implemented: patient participation remains inefficiently low because patients do not internalize the platform’s cost-reducing effect. In contrast, allowing two regulated prices, one for offline visits and one for platform bookings, re-stores the first best. Overall, our findings suggest that an optimal pricing or reimbursement mechanism should differentiate across booking channels. |
| Keywords: | Healthcare online platforms; Price regulation; Patient-physician matching. |
| JEL: | I11 I18 L51 H75 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131693 |
| By: | Martin Summer (Oesterreichische Nationalbank, Economic Studies Division) |
| Abstract: | As central banks explore issuing digital currencies for public use, a critical design challenge is how to protect the privacy of the granular data trails digital payments leave behind. While privacy is widely recognised as a goal, policy debates often frame it as a trade-off with crime prevention—limiting ambition and reinforcing legacy design choices that assume privacy and enforcement are fundamentally in compatible. This risks replicating the data practices of commercial platforms in public infrastructure. This paper charts an alternative approach. Recent advances in privacy-enhancing technologies (PETs) now enable both strong privacy protec tions and verifiable compliance through programmable, rule-based auditability. By embedding such capabilities directly into system architecture, central banks can make privacy a built-in feature of digital money—strengthening institutional trust. Building on recent advances in cryptography and strategic analysis, we offer a con ceptual framework that treats privacy and auditability as distinct design dimen sions, and distil three design principles for privacy-protective CBDCs that remain compatible with enforcement needs. We also introduce a “PET dashboard” that maps specific technologies to CBDC system layers, highlighting where collaboration across central banks, academia, and industry is most needed. |
| Keywords: | CBDC, privacy-enhancing technologies (PETs), economics of privacy |
| JEL: | E42 G28 D82 O33 |
| Date: | 2026–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:onb:oenbwp:278 |
| By: | Robin Ng; Michael Wessel |
| Abstract: | In May 2024, Google introduced AI Overviews, which synthesize search results into direct answers on the search engine results page, contributing to the growing prevalence of zero-click searches. Notably, Google does not employ AI Overviews for every search query. The key to understanding this selectivity lies in the heterogeneity of search intent, and we argue that AI Overviews are best understood as a strategic instrument for maximizing average revenue per user. We develop a theoretical framework in which a monopolist search platform decides whether to deploy AI Overviews across queries that differ in their search intent along two dimensions: whether the search is exploratory or targeted, and whether it is monetizable. For each intent type, we derive conditions under which the platform benefits from deployment and generate testable hypotheses. To test these predictions, we construct a novel dataset of over 2, 000 Google search queries and 15, 118 search engine results page observations, where AI Overviews appeared in 31.2% of searches. Consistent with revenue maximization, we find that deployment patterns vary systematically across intent types: for exploratory queries, AI Overviews are deployed by default and withheld only when organic results already suffice or source quality is too low; for targeted queries, deployment is rare and occurs only when the platform lacks confidence in the organic match. Across all intent types, deployment exhibits an inverted-U relationship with source quality. Our findings provide empirical evidence that AI Overview deployment varies strategically with search intent and that AIOs can be characterized as a novel form of platform self-preferencing, with implications for content creators, advertisers, and regulators concerned with platform market power. |
| Keywords: | Generative AI, search intent, plaorm design, search adversing, zero-click search |
| JEL: | D8 L86 O33 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2026_742 |
| By: | Steven F. Koch; Yuxiang Ye |
| Date: | 2024–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:rza:ersawp:894 |
| By: | GHOSH, Arghya; HODAKA, Morita; SATO, Susumu |
| Abstract: | Firms compete in both product and labor markets by making decisions about hiring, training, and poaching workers. We develop a theoretical model in which firm-sponsored training links product and labor market competition. Changes in labor, product, or overall market power influence firms' incentives to invest in training, which can lead to clear-cut welfare improvements benefiting all relevant parties. The distinction between under- vs. overinvestment in training, a unique feature that emerges from the interaction between the two markets, plays a critical role in determining whether or not such welfare improvements are possible, enriching welfare and policy implications. |
| Keywords: | product market competition, oligopoly, market power, labor mobility, training, welfare, antitrust implications |
| JEL: | D21 L13 L40 M50 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hitcei:2025-04 |
| By: | Jesper Akesson; Kush Amlani; Raul Cepeda Suarez; Emily Chissell; Stefan Hunt; Michael Luca; Gemma Petrie |
| Abstract: | Can active choice mitigate the effects of preset defaults? We study this question using a difference-in-differences design around the rollout of the EU’s Digital Markets Act, which required iOS and Android to display browser choice screens under certain conditions. We find large effects, with notable differences across platforms: from 15 months after the mandate onward, Firefox usage was 113 percent higher on iOS and 12 percent higher on Android relative to a no-mandate counterfactual. This gap is consistent with rollout differences, as Android showed choice screens primarily on new devices, whereas iOS also showed them on existing devices. |
| JEL: | D03 K0 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35112 |
| By: | Boeri, Tito (Bocconi University); Crescioli, Tommaso (Prometeia); Garnero, Andrea (OECD); Luisetto, Lorenzo (Cleveland State University) |
| Abstract: | Can collective bargaining mitigate monopsony power? This paper addresses this question by examining how the regulation of noncompete agreements for employees by collective agreements affects firm-level markdowns in the French manufacturing sector. Using a staggered difference-in-differences approach, we find that the regulation of noncompetes set by collective agreements leads to a 1.3%-2.2% reduction in markdowns on average. The effect grows over time and is more pronounced for smaller, less productive firms that pay lower wages. Studying a landmark decision of the French Supreme Court that introduced the obligation to have a compensation to consider a noncompete enforceable, we find a significant complementarity between the regulation of noncompetes at the national level (e.g., via case law) and sectoral collective bargaining. By enhancing compliance or imposing further restrictions, collective bargaining can serve as an effective tool to regulate the use of noncompete agreements. |
| Keywords: | monoposony, unions, noncompetes |
| JEL: | J42 J51 J53 J58 J31 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18564 |
| By: | Ã ngela Muñoz-Acevedo; Lukasz Grzybowski; Marc Bourreau |
| URL: | https://d.repec.org/n?u=RePEc:rza:ersawp:892 |
| By: | Fotis, Panagiotis; Polemis, Michael |
| Abstract: | In this study, we present the first systematic evidence of the impact of cartel recidivism on innovation. Combining data from an international price-fixing cartel database with the structural characteristics of the US manufacturing sectors at the six-digit NAICS level, we analyze how cartel recidivists influence subsequent innovation outcomes. Using a staggered difference-in-differences (DiD) framework for 110 US cartel cases over the period 1979-2016 and a novel heterogeneous estimator, we find that cartel recidivists lead to a significant and sustained decline in innovation progress. We argue that cartel recidivists, rather than single offenders, drive the negative impact of collusion on innovation. The results of this study are vigorous to several robustness tests, justifying the absence of pretreatment effects and endogeneity. |
| Keywords: | Cartel; Recidivism; Innovation; Antitrust; Difference in Differences |
| JEL: | D43 K21 L13 |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128115 |
| By: | Debi Prasad Mohapatra; Vatsala Shreeti |
| Abstract: | Why would a market leader choose not to patent an innovation? We study Samsung's decision to forgo patent protection for dual SIM technology in the Indian mobile handset market. Using a structural model of demand and supply estimated on quarterly product-level data from the Indian mobile handset industry, we document that rival firms' dual SIM products generated a preference discovery externality. Rival firms' widespread adoption of the dual SIM technology allowed consumers to discover the value of the technology, also benefiting Samsung itself. Counterfactual simulations show that a patent would have suppressed this externality, reducing Samsung's equilibrium profits despite holding monopoly rights. Voluntary non-patenting was therefore privately optimal. Our findings shed light on wider debates about open-sourcing in software and other markets. |
| Keywords: | innovation, patenting, telecom, preference discovery |
| JEL: | L13 O33 O34 L63 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1344 |