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on Regulation |
| By: | Elsas-Nicolle, Ambre; Genakos, Christos; Kretschmer, Tobias |
| Abstract: | Can entire markets strategically confuse consumers to raise market prices? Using a detailed dataset covering virtually all mobile phone tariffs and their handsets in the United Kingdom between January 2010 and September 2012, we study the evolution of quality adjusted prices and find that they increased until December 2010, even though the industry was mature, technologically homogeneous, and competitive. Upon exploring the role of several salient factors, such as differentiation and product proliferation by firms that may have affected this evolution, we argue that the primary driver is the implementation of obfuscation strategies by firms. The observed price increase is significantly correlated with the rate at which operators implemented dominated tariffs (i.e., tariffs for which there is a cheaper alternative from the same operator), indicating that firms use obfuscation strategies to reduce product transparency, thereby elevating overall prices. Importantly, the presence of dominated tariffs raises not only the prices of these contracts but also those of efficient ones, distinguishing our findings from a behavioral price discrimination strategy that would only affect inattentive consumers. Our exploratory study is one of the first to offer suggestive evidence of obfuscation as an industry-wide supply-side phenomenon. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21320 |
| By: | Broso, Matteo; Valletti, Tommaso |
| Abstract: | We study the impact of mergers on quid-pro-quo lobbying and elections in a political agency model. Two incumbent firms can lobby an incumbent politician to block a pro-competitive reform. The politician’s type determines whether they are susceptible to the firms’ influence or not. A representative voter tries to infer the politician’s type monitoring the policy-making process. We show that lobbying increases when firms merge because rents from political protection are not dissipated by price competition. While greater market concentration may increase prices and political influence, it also improves voters’ ability to screen bad politicians by observing distorted policy outcomes. This generates a novel trade-off: mergers can harm consumers through market and political power, yet improve selection of politicians. We characterize when standard consumer welfare–based merger control is too lenient or too strict once these political economy effects are taken into account. |
| Keywords: | Mergers; Lobbying; Consumer welfare standard; Antitrust policy; market power; Political economy of competition policy |
| JEL: | D72 D43 L41 L13 K21 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21420 |
| By: | Gaston Llanes; Martin Peitz |
| Abstract: | We study a platform that interacts with a major content provider, a long tail of independent providers, and consumers who allocate attention across competing content. By designing independent-provider compensation, the platform endoge nously shapes its outside option and disciplines the major. This strategic use of long-tail compensation distorts entry relative to the first best. Allowing the platform to steer consumer attention improves entry incentives conditional on compensation, but affects bargaining incentives, and may thus increase or de crease welfare. We then consider regulation, showing that conservative minimum compensation floors robustly improve welfare, while non-discrimination policies have ambiguous welfare effects. |
| Keywords: | streaming platform, Nash bargaining, royalty negotiation, free entry, consumer steering |
| JEL: | L14 L82 L86 D43 D44 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_766 |
| By: | Comisión Nacional de los Mercados y la Competencia (CNMC) (Comisión Nacional de los Mercados y la Competencia (CNMC)) |
| Abstract: | The development of electric mobility is a priority within the framework of policies to decarbonise the economy. This study analyses, from a competition and better regulation perspective, the activities related to charging services at publicly accessible charging points, in order to identify areas where there is scope to promote competition and efficiency in the sector. To make proposals for improvement, the study recommends the following. First, to adopt efficient and pro-competitive regulations for the deployment of charging infrastructure. Second, to reduce bureaucratic burdens to what is strictly necessary. Third, to promote competition and efficiency in administrative concessions for the installation of charging points. Fourth, to promote transparency and consumer choice. Fifth, to design deployment obligations and state aid in a pro-competitive manner. Sixth, to maintain enhanced monitoring of the sector and consider the adoption of new market investigation tools. |
| Keywords: | Regulation, Competition, Electric vehicle, Charging points |
| JEL: | L22 L92 L94 Q42 R48 |
| Date: | 2026–06–09 |
| URL: | https://d.repec.org/n?u=RePEc:awo:epaper:e/cnmc/003/22_eng |
| By: | Albers, Thilo Nils Hendrik; Nützenadel, Alexander; Scheib, Tobias |
| Abstract: | The regulatory cycle view suggests that periods of deregulation encourage increased risk-taking, which in turn leads to financial crises and subsequent re-regulation. To test this proposition, we develop a novel 10-item index capturing prudential and structural banking regulation across 14 countries over the past century. We find that deregulation is indeed associated with heightened risk appetite and credit expansion. However, the regulatory response to financial crises has changed significantly over time. Consistent with the financial trilemma, the evidence suggests that the cycle has weakened, as open capital accounts are increasingly incompatible with effective regulation at the national level. |
| JEL: | F68 G18 G28 N10 N40 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21419 |
| By: | ALEKSENKO, STEPAN; Miklos-Thal, Jeanine |
| Abstract: | We analyze the effects of information sharing in oligopoly when firms outsource pricing to a common third-party pricing algorithm developer. In a model where algorithms tailor prices to high-frequency demand shocks, we compare regimes that allow or prohibit conditioning on rival-specific shocks. Information sharing makes algorithmic prices more sensitive to seller-specific demand shocks---own and rival---and more correlated across sellers. These effects are stronger under common third-party algorithm design than under independent design because the third party's objective generates greater strategic complementarity in pricing than independent profit maximization. Information sharing harms expected consumer surplus more under common third-party design than under independent design, and its welfare effects are reversed across the two cases: information sharing lowers expected welfare under common third-party design while raising it under independent design. Our findings provide theoretical support for recent antitrust scrutiny of common third-party pricing algorithms that incorporate competitor data. |
| Keywords: | Algorithmic pricing; Information sharing; Antitrust; Oligopoly; Third-party sharing |
| JEL: | L13 L41 L42 D43 L86 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21452 |
| By: | John A. List; Matthias Rodemeier; Sutanuka Roy; Gregory Sun |
| Abstract: | Behavioral interventions have become central to modern public policy, but their empirical promise remains contested because estimated treatment effects often appear small. We argue that a policy response is economically meaningful only relative to the response generated by alternative policies. We assemble more than 1, 200 estimates from over 600 studies comparing "nudges" and traditional price interventions in the markets for cigarettes, alcohol, influenza vaccination, electricity, and residential water. Translating nudge effects into equivalent price changes, we find that behavioral interventions often correspond to enormous fiscal interventions, from an 11% tax on electricity to a 100% subsidy on influenza vaccinations. Nudges are also more cost-effective than price instruments in all markets, but cost-effectiveness does not predict the welfare ranking of policies. Using a behavioral extension of the Marginal Value of Public Funds, we show that nudges have high welfare returns at the margin, while price instruments often generate larger total surplus at scale. |
| Keywords: | nudges, paternalistic taxes, welfare, energy efficiency, water conservation, influenza vaccination, cigarettes, alcohol consumption, RCTs |
| JEL: | D61 D83 H21 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12775 |
| By: | Snower, Dennis; Twomey, Paul |
| Abstract: | This article argues that the governance of artificial intelligence (AI) requires a fundamental institutional redesign rather than incremental regulatory reform. Existing frameworks fail due to structural misalignment with AI’s autonomy, compositionality, and concentration dynamics. In a context where global coordination is infeasible and national regulation insufficient, the paper advances coalition-based digital governance as a second-best yet effective solution. It develops a comprehensive architecture grounded in Control–Accountability–Protection (CAP), operationalized through interoperable standards, data-control infrastructure, and coordinated enforcement. The article further proposes layered guardrails—including trade-based compliance, soft-power monitoring, and hard-power sanctions—to ensure enforceability and redress across jurisdictions. |
| JEL: | D02 D82 F55 K23 L41 L86 O33 O38 P16 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21564 |
| By: | Coen, Jamie; Gavazza, Alessandro; Gottlieb, Daniel; Ramadorai, Tarun |
| Abstract: | We develop a theoretical model and test its predictions using granular search, choice, and pricing data from the UK motor insurance market around the introduction of price walking regulation. Before the policy, insurers attracted new customers with low prices while raising prices for existing customers. After regulation, introductory discounts to likely inactive customers fell, but insurers responded by proliferating products and segmenting the market more finely. Inactive customers therefore still pay a substantial price penalty relative to active searchers, through different mechanisms. Our findings illustrate how firms can redesign products in ways that blunt even well-designed regulation. |
| Keywords: | Insurance; Financial regulation |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21357 |
| By: | Dan Andrews; Tito Boeri; Andrea Garnero; Sindri Engilbertsson; Sara Holttinen; Lorenzo G. Luisetto |
| Abstract: | Non-compete clauses can protect firms’ legitimate interests such as trade secrets or training investments, but they can also hinder worker mobility, wage growth, and innovation. Therefore, the way these clauses are regulated is central to balancing business needs with labour market dynamism. This paper provides the first cross-country analysis of non-compete regulatory regimes in OECD countries. It documents the main legal dimensions that govern their enforceability, and it develops a new index that captures regulatory strictness and structure. This extends earlier work on the United States. By systematically mapping these frameworks, the paper helps to fill a significant knowledge gap and supports policymakers in evaluating the effectiveness of current regulations in balancing the protection of firms with the fostering of competitive and innovative labour markets. |
| Keywords: | Job Mobility, Non-Compete Clauses, Regulation |
| JEL: | J41 J62 K31 |
| Date: | 2026–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:oec:elsaab:332-en |
| By: | Drechsel, Thomas; Miura, Ko |
| Abstract: | Bank regulation supports financial stability, but might constrain economic activity. This paper estimates the macroeconomic effects of bank regulation using a high-frequency identification approach. We measure market surprises in a bank stock price index during a narrow time window around Federal Reserve speeches that discuss the US banking system and its regulation. We then develop a sign restriction procedure to elicit the variation in these market surprises that can be interpreted as news about bank regulation. News that bank regulation will be tighter than expected mitigates risk in the banking sector, but reduces economic activity by increasing banks' funding costs and tightening loan supply. A 10 basis point regulation-induced peak reduction in bank risk premiums is accompanied by a 15 basis point peak increase in the unemployment rate. Compared to previous studies, these magnitudes suggest a relatively high macroeconomic cost of tightening bank regulation, at least in the short run. |
| Keywords: | Federal Reserve; Bank regulation; Macroprudential policy; High-frequency identification; Sign restrictions |
| JEL: | E44 E51 E52 E58 G28 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21371 |
| By: | Parma Bains; Gabriela E Conde; Nobuyasu Sugimoto; Caroline Wu |
| Abstract: | Large technology firms (BigTech) are increasingly expanding into consumer-facing financial services, particularly payments, credit, insurance, asset management, and financial SuperApps. While their current financial stability implications remain limited in most jurisdictions, rapid growth, especially in emerging market and developing economies, raises new conduct, prudential, and systemic risks. This paper analyzes BigTech business models, key activities, and associated risks, and assesses the adequacy of existing regulatory frameworks. It discusses practical options for supervisors to enhance risk identification, strengthen sector-based and group-wide supervision, expand the regulatory perimeter, improve data protection frameworks, and reinforce domestic and international coordination. No global financial standards apply specifically to BigTech. Given the cross-border nature of BigTech activities, global standards should be developed to facilitate internationally consistent regulation and effective cross-border cooperation. |
| Keywords: | BigTech; BNPL; conglomerate; emerging market and developing economies; financial stability; fintech; systemic risk; insurance; credit; payments; asset management; regulation; supervision |
| Date: | 2026–07–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2026/009 |
| By: | S. Auray; V. Caponi |
| Abstract: | Time-varying electricity pricing is a central lever for managing peak demand as grids decarbonise, yet most credible estimates of how much residential demand responds come from small, shortlived pilots. We provide evidence from a tariff that is neither - the French TEMPO scheme, an operational national tariff that for nearly three decades has priced peak hours four to five times higher than standard on up to 22 pre-announced "Red" winter days. Using national daily consumption for the TEMPO-subscriber segment—nearly one million metering points—linked to the grid operator's assignment calendar and forecasts, we find that Red days cut total residential consumption by about 23% relative to comparable non-Red days, peak-hour consumption by roughly 30%, and off-peak consumption by about 13%. The off-peak decline shows the response is genuine curtailment, not merely load-shifting within the day. These effects, drawn from a tariff already in force at scale, sit at or above the upper end of what critical-peak-pricing experiments have recovered from far smaller samples. The central identification challenge is that the operator assigns Red days to the highest-demand days, so raw colour comparisons confound behaviour with weather. We address this by exploiting three features of the assignment rule that move colour status independently of contemporaneous household demand—renewable-driven variation in net load, a threshold paced mechanically by a fixed seasonal quota, and an end-of-season clause that forces the operator to place its remaining Red days regardless of the forecast (13 of 22 Red days in 2025–26 fell in this forced window). Matching comparable days on a forecast-based demand index and letting the binding quota widen the comparison window yields short-run peak elasticities of −0.23 to −0.27 and total-consumption elasticities of −0.28 to −0.32, stable across three estimators that lean on the rule to differing degrees. The results give tariff designers a real-world benchmark for event-based pricing, and the identification strategy—a quota-forcing regression discontinuity—applies wherever a capped allocation must be exhausted on a deadline. |
| Keywords: | electricity demand, dynamic pricing, time-of-use tariff, demand response, residential consumers, France |
| JEL: | C14 C26 D11 D91 L94 Q41 Q48 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202608 |
| By: | Daniele, Gianmarco; Martinangeli, Andrea; Passarelli, Francesco; Sas, Willem; Windsteiger, Lisa |
| Abstract: | Why do advanced democracies struggle to maintain high levels of trust? We present a theory grounded in everyday interaction among individuals. Governments rely on regulation to foster cooperation and mitigate externalities. Individuals, however, hold heterogeneous perceptions of the externality problem. As a result, regulation generates distrust toward the government, but for different reasons. Those who are more concerned about the externality blame the government for adopting rules they view as too lenient. Those who are less concerned object to being required to comply with rules they perceive as unnecessary. Regulation also shapes interpersonal trust. Once in place, rules define standards of civic behavior and become reference points for evaluating others’ actions. Interpersonal trust erodes when non-compliance is observed. The theory predicts asymmetric patterns of trust polarization, with “disobedient†groups primarily distrusting political institutions and “civic†groups mostly distrusting non-compliant individuals. It also predicts a joint decline in interpersonal and institutional trust as regulation tightens or beliefs become more dispersed. Evidence from a large survey experiment conducted in the aftermath of the Covid-19 pandemic supports these predictions. |
| Keywords: | Regulation; Externality; Covid-19 |
| JEL: | D70 D72 H3 O52 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21462 |
| By: | Dermot P. Coates (Head of the Irish Government Economic and Evaluation Service (IGEES)) |
| Abstract: | This paper examines the evolving role of State Aid within the European Union’s Single Market, with a focus on the expansion of the Important Projects of Common European Interest (IPCEI) instrument. While State Aid is generally restricted due to its potential to distort competition, recent economic and geopolitical pressures have prompted a more flexible approach across the EU. The analysis examines how successive crises, from COVID 19 to supply chain disruption and the green and digital transitions, have reshaped EU industrial policy and intensified the use of IPCEIs alongside other instruments, to address market failures and support breakthrough innovation. Using EU State Aid expenditure data, the paper highlights widening divergences in State Aid between larger and smaller Member States and assesses the implications for competitiveness and the cohesion of the level playing field. The study evaluates Ireland’s limited engagement with IPCEIs to date, the fiscal constraints shaping participation of smaller countries, and recent policy commitments aimed at increasing involvement. It argues that while IPCEIs present significant opportunities for technological innovation, they also carry risks of market fragmentation and an emerging subsidy race. The paper concludes by outlining policy options to strengthen Ireland’s strategic positioning within an evolving EU State Aid landscape. |
| Keywords: | Competition, Competitiveness, Subsidies, State Aid, Single Market, European Union, Ireland |
| JEL: | E02 F02 F13 H25 H32 |
| Date: | 2026–06–23 |
| URL: | https://d.repec.org/n?u=RePEc:ucd:wpaper:202602 |