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on Regulation |
| By: | Joshua S. Gans |
| Abstract: | Why might firms make different claims in advertising both with respect to themselves and to rivals? I study how claims direct consumers to different customer experiences, and how prices change the available evidence. Attributing successes to the advertiser requires a low price when its product is superior; attributing failures to the rival supports a higher price. Focussing on a single strategic advertiser, the model shows that the claim that attracts the most customers to a superior product never maximises profit. The optimal campaign raises advertiser profit but lowers consumer surplus relative to fully informed choice, and reduces total welfare whenever product reliabilities differ. When both firms choose claims and prices, competition can sustain a mix of positive and negative claims with price dispersion, restoring claims that a lone advertiser would reject. A rival's pricing response alone can make failure attribution optimal by weakening incentives to undercut. Allowing the rival to advertise can lower both prices and shift customers towards it if the incumbent retains its previous claim; allowing the incumbent to change its claim can eliminate this additional effect. Advertising, therefore, changes not only persuasion but also pricing incentives, making its market consequences different from its effects at fixed prices. |
| JEL: | D83 D91 L13 M31 M37 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35770 |
| By: | Adrian Hillenbrand; Hans-Theo Normann; Matthias Potarca; Tobias Werner |
| Abstract: | Rule-based pricing tools are widespread in digital commerce, yet we know little about how their design shapes market outcomes. In a controlled market experiment, participants use dashboards to build pricing algorithms competing in a sequential Bertrand game over multiple periods. We vary design features commonly found in commercial repricing tools: warnings about price wars, pre-configured strategies, and advice from a large language model. Most treatment variations raise market prices with effects driven by an increase in starting prices and more cooperative algorithm designs. The results matter for competition policy, platform regulation and current discussions on regulating algorithm design tools. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.26861 |
| By: | Sheybanivaziri, Samaneh (Dept. of Business and Management Science, Norwegian School of Economics); Kyritsis, Evangelos (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Europe’s move toward renewable energy has sped up as the need to cut emissions has become closely linked with the need to secure energy supply. The EU’s Fit for 55 package proposed a 40% renewable energy target for 2030 [16]. The REPowerEU plan later raised the ambition to 45% in May 2022 in response to the need to reduce dependence on Russian fossil fuels [17]. Besides the significant contribution of renewable energies to the generation mix, they have created a dichotomy in electricity prices. An abundance of renewables can create extremely low prices and high volatility. On the other hand, their absence or insufficiency turns the gas-fired units or some fossil fuels on, which can create extremely high power prices. This phenomenon, in combination with geopolitical factors, has generated a binary fat-tailed distribution in electricity prices, which motivated us to study it more closely. Therefore, in this paper, we analyse the determinants of extreme electricity prices by modelling the conditional tail index. Additionally, we extend the analysis by [18] to a more recent sample period. We show that observable market conditions, such as TTF prices, load, and renewable generation in Germany and Italy from 2018 to 2023, affect the heaviness of the price distribution tail, a dimension of risk that is not captured by standard approaches such as quantile regression. |
| Keywords: | Extreme electricity prices; conditional tail-index estimator |
| JEL: | C14 C22 Q41 Q42 |
| Date: | 2026–09–21 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2026_011 |
| By: | Gautam Gowrisankaran; Christopher D. Bruegge; Alex Gross |
| Abstract: | Analyses of impacts of potential mergers in differentiated product markets often rely on non-transparent identification and strong conduct assumptions. We propose a simpler alternative: using quasi-exogenous variation in market structure to estimate equilibrium pricing policy functions. When price can appropriately capture consumer welfare, this methodology may require fewer assumptions than a structural equilibrium approach, including allowing variation in conduct. We apply this methodology to the JetBlue–Spirit merger, estimating policy functions using entry events. Our counterfactual price simulations account for changes in JetBlue’s capacity and Sprit’s elimination. The merger would cause $2.6 billion in annual harm under our preferred specification. |
| JEL: | L13 L41 L93 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35787 |
| By: | Walter Kurz; Wojtek Stricker |
| Abstract: | European electricity trading in the EU operates as a constrained multi-layer system in which legal design, exchange microstructure, and network physics are executed jointly across forward, day-ahead, intraday, and balancing horizons. This paper develops a functional architecture for AI-supported trading that is aligned with market-coupling mechanics, cross-zonal transfer constraints, and compliance obligations under REMIT, MiFID II, MiFIR, and EMIR. The contribution is a formal system specification composed of a decision-state vector, residual-exposure accounting, constrained optimization objective, executable-action permission gate, and fail-closed AI control logic with auditable records. The analysis maps major Nominated Electricity Market Operator (NEMO) venues and related exchange operators into an operational venue topology and identifies where cross-border coordination fails in practice: interface-level timing, permission heterogeneity, and balancing-layer coupling. The resulting framework proposes how AI can be deployed as a bounded decision component inside regulated market operation with explicit governance, rather than as an unconstrained prediction layer. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.29108 |
| By: | Irene Di Marzio (Bank of Italy); Sara Pinoli (Bank of Italy) |
| Abstract: | Mergers and acquisitions (M&As) play a key role in the restructuring of the business sector, with potential implications for economic growth, allocative efficiency, market power and the public interest. This paper uses data from the Chambers of Commerce and Moody's Orbis, documents M&A deals in Italy and other major European Union countries to describe the firms involved and examine the effects of M&As on firm performance. The main findings show that, over the past decade, approximately 6, 000 operations per year have been recorded in Italy, with the trend increasing over the last five years. M&As have primarily involved firms that are more technologically advanced, both in manufacturing and services, and have contributed to the consolidation of the production system. Within five years of the deal, employment in the consolidated firm is about 4 per cent lower than it would have been without the deal. This evidence is partly due to divestitures of business units, consistent with processes of productive reorganization. The impact of M&A transactions varies depending on the competitive environment: in less internationally exposed sectors, an increase in market power is also observed, whereas no significant effects are found in tradeable sectors. |
| Keywords: | mergers and acquisitions, firm performance, market power, competition |
| JEL: | G34 L25 L40 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1045_26 |
| By: | Jerrentrup, Pauline; Kosche, Jade |
| Abstract: | This article examines how a transnational coalition of NGOs, unions, and labor rights organizations drove both privateand public regulation on gender-based violence and harassment in Lesotho's garment sector, and how the resulting regula-tory systems coexist despite ongoing tension between them. Drawing on 15 months of ethnographic fieldwork, stakeholderinterviews, and archival analysis, we show that the coalition leveraged reputational and diplomatic pressures, enabled by Lesotho's structural dependence on the United States as both buyer and donor, to secure the Lesotho Agreement and subsequent public regulatory reforms. The same dependencies that enabled these reforms also generated sustained tensions once the regulatory systems were in place. We term this dynamic contested coexistence—a governance configuration in which a supplying country's structural dependence on a buyer country forecloses rejection of a private regulatory system while constraining open endorsement of it—and identify it as a new form of private-public interaction within Cashore et al.'s framework. |
| Keywords: | gender-based violence;global value chains;labor governance;public-private governance;transnational private governance |
| JEL: | J1 |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141041 |
| By: | Yi Chen; Fei Li; Marcel Preuss |
| Abstract: | We study revenue-maximizing attention allocation on an ad-funded social media platform governed by recommendation algorithms. Attention is costly and can be monetized through advertising or allocated to increase creators' exposure, creating a trade-off between monetization and production incentives. In a two-sided model with heterogeneous viewers and creators under private information, the optimal recommendation mix includes content that is ex post suboptimal for some viewers to leverage network externalities. These distortions are targeted: low-ability creators are excluded, while high-ability creators are subsidized through exposure or monetary payments. Two-sided complementarities reshape content variety and quality, with implications for personalization regulation and advertising markets. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.15573 |
| By: | Jacob T. Hess (Banco de España); Xufeng Wang (KU Leuven) |
| Abstract: | We study how revenue productivity (TFPR) and markups evolve after mergers across the economy. In financial-statement data, targets cease to exist as reporting entities after a deal, so tracking the merged firm requires constructing the combined acquirer-target unit before the merger. We formalize the biases that arise without this correction and implement it across 3, 759 horizontal mergers in Spain between 1997 and 2022. Revenue productivity rises by approximately 4% within eight years and markups by approximately 5% to 6%. The breakdown by industry reveals that revenue productivity gains are broad-based, while markup increases are concentrated. Most industries show modest markup effects of 3% or less, with the largest increases occurring in two industries accounting for a small share of deals, led by human health activities. We find that without the boundary correction, both estimated effects reverse sign. The results suggest that mergers tend to raise the revenue productivity of the combined firm across the board, consistent with operational improvements, while large markup increases are a feature of specific industries rather than a general consequence of consolidation. |
| Keywords: | mergers and acquisitions, revenue productivity (TFPR), markups, consolidation |
| JEL: | C23 D24 G34 L41 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2631e |
| By: | Ryan Singleton (Adelaide University); Qazi Haque (Adelaide University); Firmin Doko Tchatoka (Adelaide University) |
| Abstract: | The global transition to low-carbon energy has led many countries to adopt national hydrogen strategies, yet their policy impacts and adoption drivers remain poorly understood. This paper investigates these issues using panel data for 49 countries from 2010 to 2023. Policy impacts are assessed via a staggered difference-in-differences framework, while the determinants of adoption are analysed using a fixed-effects linear probability model. We find that adoption is associated with a sustained and economically significant increase in public hydrogen R&D spending, signalling credible government commitment, and a smaller rise in carbon capture, utilisation, and storage (CCUS) R&D, reflecting continued support for fossil-fuel-linked technologies. No short-run reduction in industrial process emissions is observed, suggesting that decarbonisation effects materialise gradually. Turning to the determinants of adoption, within-country growth in renewable electricity generation emerges as the strongest predictor of adoption, highlighting the interdependence between renewable expansion and hydrogen policy formation, while macroeconomic and political factors appear largely insignificant. These results shed light on the effectiveness and determinants of national hydrogen strategies in the global energy transition. |
| Keywords: | Hydrogen policy; National hydrogen strategies;Difference-in-differences;Event study; Policy adoption; Energy transition. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:adl:wpaper:2026-01 |
| By: | Takanori ADACHI; Naoshi DOI |
| Abstract: | We study cost pass-through under nonlinear pricing when a monopolistic seller offers a single good in two fixed package sizes to heterogeneous consumers. Building on the Edgeworth–Salinger paradox of taxation, we show that Edgeworth-type price responses can arise across package sizes of the same underlying product. A common increase in per-unit marginal cost may induce the seller to lower the per-unit price of the small package while raising that of the large package. Under multinomial logit demand, pass-through to the large package is analytically greater than pass-through to the small package. Numerical analysis shows that this ordering is remarkably robust to random-coefficient demand heterogeneity. Negative pass-through for the small package is quantitatively important and becomes substantially more likely as the difference between package sizes increases. Consumer sorting also matters: a more positive correlation between price sensitivity and preferences for larger packages increases the likelihood of negative pass-through for the small package and widens the pass-through gap across package sizes. Thus, nonlinear pricing can transform a common supply-side cost shock into sharply different price responses across quantities purchased, with potentially important implications for the distributional incidence of cost shocks. |
| Keywords: | Pass-through; Quantity discounts; The Edgeworth-Salinger paradox. |
| JEL: | D42 D43 H22 L11 L13 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:kue:epaper:e-26-002 |
| By: | Simshauser, P. |
| Abstract: | This article examines whether zonal average-price wind swaps, more accurately defined as Asian wind swaps, are a 'bankable' instrument. Specifically, can a derivative that references the wind fleet's average price underwrite a bespoke project financed new entrant wind farm in Australia’s National Electricity Market? Prima facie, long -dated Asian swaps referencing the wind fleet’s dispatch-weighted average price present as a material departure from convention, viz. site-specific fixed price (run-of-plant) Power Purchase Agreements. Using South Australia as a deliberately demanding test case, ten years of chronologically matched 30-minute spot-price and wind-production data are block-bootstrapped into 10, 000 synthetic years of market data. This data is the n utilised within a hedge optimisation and stochastic project finance models across heterogeneous wind farms with explicit strike -price calibration and debt-sizing to stress-test the 'bankability' of Asian wind swaps. Results confirm when hedge quantities are optimised, and strike prices calibrated to entry costs, Asian wind swaps reduce revenue volatility and support project finance, with debt sizing at broadly equivalent levels to a conventional PPA. Findings suggest an Asian wind swap can plausibly replace bespoke government-originated CfDs, which in turn raises the prospect of seamless divisible re-trading and the creation of liquid secondary markets – a necessary precondition for a healthy retail supplier market. |
| Keywords: | Renewables, Energy-Only Markets, Project Finance, Asian Wind Derivatives, Asian Swaps |
| JEL: | D52 D53 G12 L94 Q40 |
| Date: | 2026–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2676 |
| By: | OECD |
| Abstract: | Online platforms are a defining feature of today’s highly digital economy, reshaping how people access services, trade, and interact. Digital intermediation platforms (DIPs) – which connect buyers and sellers without taking ownership of goods or services – play a pivotal role in facilitating e-commerce and digital trade. This paper presents novel data about the diffusion of DIPs across three key consumer-facing sectors: travel and accommodation booking, ride-hailing and carpooling, and online marketplaces. Using website traffic data as a proxy for platform reach, it provides insights not only into the scale and scope of platform uptake, but also the degree of foreign presence in each sector studied. Building on these measures, the analysis considers how regulatory measures affecting digitally enabled services trade are associated with platform diffusion and foreign participation across markets with the aim of enhancing productivity, fostering innovation, and maximising the opportunities of digital trade. |
| Keywords: | Digital intermediation platforms, digital trade, e-commerce |
| Date: | 2026–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaab:386-en |
| By: | Hilde Stevens; Georges Siotis; Micael Castanheira De Moura; Mathias Dewatripont; Sanaé Akodad; Sam Daems; Alain Fischer; Michel Goldman |
| Abstract: | Orphan drug policy in the European Union faces a double price-and-innovation gap: a small fraction of rare diseases receive important resources while the overwhelming majority are under- or un-researched, leaving most rare disease patients facing high unmet medical needs. The European Commission's reform proposals, notably the Pharma Package and the European Biotech Act, seek to rebalance incentives by adjusting market exclusivity. We argue that, while these reforms move in the right direction, they are insufficient to foster meaningful innovation while safeguarding affordability, and that a broader, more structural approach is needed. We show how proposals from the Draghi Report could complement the reforms through an EU-level HTA Coordination Office, a US-style EU ARPA-H, and expanded regulatory sandboxing. We then propose two additional instruments: public-private Special Purpose Vehicles to de-risk high-need innovation, and EU-level joint procurement to strengthen affordability and create predictable demand. Ultimately, only a coherent, well-calibrated framework can align industrial policy with the EU's ambition of leaving no rare-disease patient behind. |
| Keywords: | Access; Affordability; Draghi Report; Drug pricing; EU Biotech Act; EU Pharma Package reform; Innovation incentives; Market exclusivity; Orphan medicinal products (OMPs); Policy; Rare diseases; Regulation |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/414127 |
| By: | OECD |
| Abstract: | Neurotechnologies are rapidly expanding across clinical, research, and consumer domains, creating unprecedented opportunities for improving medical care, overcoming disabilities, and transforming everyday life. Their operation depends on neurodata, a diverse set of signals and information derived from processing, which can be generated across complex digital, clinical, and business environments and may be highly sensitive for the individuals concerned. A growing number of policy frameworks address the data governance aspects of neurotechnology globally. While indispensable, their overlap also makes compliance challenging, triggers concerns of uneven oversight and hindrance to innovation, while potentially overlooking high-risk uses. To inform coherent and proportionate approaches to neurodata governance, this paper analyses the current policy landscape and company practices, mapping how such data are collected, transformed, and used throughout the data lifecycle. The findings highlight the importance of a responsive, human-centric, and evidence-based policy approach that is adaptable to technological developments and aligned with innovation, growth, and public benefit. |
| Keywords: | agile regulation, data governance, emerging technologies, medical device regulation, neurodata governance, neurotechnology, privacy |
| JEL: | I18 K24 O33 O38 K29 |
| Date: | 2026–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaac:195-en |
| By: | Walter Kurz; Reinhard Magg |
| Abstract: | We present a compliance-first architecture for AI in regulated finance that treats regulation as an orientation layer rather than a deterministic ruleset. A matrix of regulatory intent and exposure provides a compact classification handle, which a governed policy compiler then maps into concrete prohibitions, obligations and runtime budgets. Prohibitions constrain feasibility and block externalisation, while obligations extend tasks with artefacts that must meet explicit admissibility criteria. Committee activation remains policy-driven and proportionate, preserving efficiency while ensuring supervisory oversight. Evidence, decisions and reason codes are bound to a permissioned DAG with deterministic timestamping, enabling replay, provenance checks and clear attribution of failure. Clause-level legal indexing with effective dates and capability-based agent routing ensure portability across DACH and the wider EU. The result is assurance by construction: compliance is embedded in execution and verifiable by auditors without sacrificing proportionality or transparency. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.27632 |
| By: | Pierre Dubois (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); Elissa Gentry (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); Tuba Tunçel (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, FSU - Florida State University [Tallahassee], CEPR - Center for Economic Policy Research) |
| Abstract: | Off-label use regulation has the potential to change pharmaceutical firms' behavior and—consequently—affect patient welfare. We investigate the impact of changes in off-label regulation on pharmaceutical firms' behavior in seeking formal marketing ap proval for supplemental uses. In 2012, a US court decision protected truthful off-label promotion, providing pharmaceutical companies more leeway to promote off-label uses of their drug. Using a unique data set of pharmaceutical firms' research and development projects, we exploit this regulatory change to understand how firms react to government policies. Results demonstrate that the hazard of approval declined for supplemental uses, relative to original uses, after the policy change. Patent protection, potential market size, and competition are also important determinants of the hazard of approval. These results have implications not only for innovation policy but for the creation of high-quality data for certain indications. |
| Keywords: | Off-label drugs, Drug efficacy, Prescription drugs, Pharmaceutical firm behavior |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05752206 |
| By: | Guglielmo Maria Caporale; Luis Alberiko Gil-Alana; Alex Medina Sosa |
| Abstract: | This paper examines whether four AI events between 2022 and 2025 - ChatGPT, GPT-4, the EU AI Act vote, and DeepSeek - changed the behaviour of fourteen US-listed stocks. The focus of the analysis is on two utilities that signed power purchase agreements with large AI companies, Constellation Energy and Vistra, which are compared with utilities that did not. The degree of persistence of the price of each stock is estimated in the periods around the events to establish whether it has changed. Volatility changes and whether the market reaction grows or fades across the events are also investigated. The results suggest that the events considered do not affect the degree of persistence of prices; however, they have an impact on their volatility for almost every stock. Among the utilities, only Constellation and Vistra exhibit a persistence shift that survives an adjustment for developments in the wider market, whilst utilities without power purchase agreements do not. Further, the response increases from one event to the next. A specific channel is identified: AI news moves a utility's price mainly when the firm has a contract to sell power to an AI company. However, this evidence is suggestive rather than conclusive. |
| Keywords: | Artificial Intelligence (AI), fractional integration, conditional variance, AI-power demand, utility stocks, event studies, structural breaks |
| JEL: | C22 C58 G14 Q41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13001 |
| By: | Anna Alberini; Levan Bezhanishvili; Milan Ščasný; Roberton C. Williams III |
| Abstract: | We examine the response of residential customers to an extreme price change – namely that imposed by the government in the Republic of Georgia during the pandemic lockdown in the winter of 2020 and early 2021. As of November 2020, the government paid the gas bill directly to the utility, effectively making gas free, as long as consumption was below or exactly 200 m3/month. The policy was lifted at the end of February 2021. We use quasi-experimental causal methods based on a control group comprised of permanent residents of an area along the North-South pipeline, who receive gas for free (up to the generous allowance of 700 m3/month) every winter, while the treatment group is comprised of households living in areas with similar climates and similar population density who received gas for free only during the pandemic free gas months. Controlling for the weather, the ATT of the policy is a 2-7% increase in gas consumption (in the treatment group compared to the control group). Back-of-the-envelope calculations suggest a price elasticity of demand of -6.5% to -11%. |
| JEL: | H23 L95 Q41 Q48 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35759 |
| By: | SECK, Djiby (ENGIE - International Supply and Energy Management) |
| Abstract: | Près de 1, 8 million de ménages sénégalais (2024) achètent leur électricité par compteur prépayé (Woyofal) sous une tarification par blocs croissants dont le cumul se réinitialise chaque mois calendaire. Nous formalisons cette structure tarifaire et démontrons quatre propriétés : l'invariance du coût de l'énergie au fractionnement des achats ; une pénalité fiscale forfaitaire par recharge au-delà du seuil de TVA ; une discontinuité calendaire créant un arbitrage temporel pouvant atteindre 8 378 FCFA par mois et par ménage ; et une régressivité mécanique à l'encontre des compteurs partagés entre plusieurs ménages, configuration répandue dans l'habitat sénégalais. Nous proposons ensuite une réforme en quatre composantes séparables (fenêtre glissante, dilatation des tranches pour compteurs partagés déclarés, tarif social profond sous condition d'éligibilité, et tarification bi-horaire de type Boiteux–Steiner) dont nous établissons les propriétés en forme fermée : stationnarité temporelle, équité horizontale, neutralité budgétaire du ciblage (avec la condition d'admissibilité α ≥ 1 − p1/κ) et auto-financement du signal horaire au calibrage coût-reflet. Un calibrage illustratif montre qu'à enveloppe de subvention constante, un tarif social de l'ordre de 24 FCFA/kWh est atteignable pour les ménages éligibles, contre 82 FCFA/kWh servis aujourd'hui à tous les compteurs sans ciblage. L'ensemble des calculs est reproductible à partir d'un moteur tarifaire open source aligné au franc près sur les barèmes officiels. Nearly 1.8 million Senegalese households (2024) buy electricity through prepaid meters (Woyofal) under an increasing block tariff whose cumulative consumption resets each calendar month. We formalise this tariff structure and establish four properties: invariance of energy cost to purchase splitting; a lump-sum tax penalty per top-up beyond the VAT threshold; a calendar discontinuity creating an intertemporal arbitrage worth up to 8, 378 FCFA per household-month; and mechanical regressivity against meters shared by several households, a widespread configuration in Senegalese housing. We then propose a four-component reform (a rolling window, block dilation for declared shared meters, a deep means-tested social tariff, and Boiteux–Steiner peak-load pricing) and derive its properties in closed form: temporal stationarity, horizontal equity, budget neutrality of targeting (with admissibility condition α ≥ 1 − p1/κ), and self-financing of the time-of-use signal at cost-reflective calibration. An illustrative calibration shows that, at constant subsidy envelope, a social tariff of about 24 FCFA/kWh is attainable for eligible households, against the 82 FCFA/kWh currently granted to all meters without targeting. All computations are reproducible from an open-source tariff engine aligned to the franc with official schedules. |
| Date: | 2026–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:xdcrq_v1 |
| By: | Muhammad Faisal Ali (Pakistan Institute of Development Economics, Islamabad); Sobia Rose (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | The wheat crisis in Pakistan accentuates the complexities and challenges of agricultural market management. That is the reason the wheat crop has always been a subject of serious debate. The Minimum Support Price (MSP) policy was one of the key factors, as substantial funds from taxpayers' money have been consumed to continue this policy. However, it has neither helped stabilize the market during crises nor protected the consumers and producers, who are assumed to be the primary beneficiaries. Conversely, flour mill owners, large landholders, or middlemen remained the primary recipients of the greatest gains. Consequently, fixing the MSP has led to unintended consequences, raising concerns about the policy's sustainability, market efficiency, and overall effectiveness |
| Keywords: | wheat market deregulation, wheat crisis Pakistan, wheat support price policy, minimum support price Pakistan, wheat market reform, wheat price Pakistan, wheat subsidy Punjab, agriculture policy Pakistan, food security Pakistan, wheat cartel Pakistan, deregulating wheat, wheat procurement issues, circular debt wheat, flour mills Pakistan, wheat farmers Pakistan, MSP policy impact, government wheat withdrawal, wheat market sustainability, strategic wheat reserves, wheat buffer stock policy, wheat production incentives, wheat policy execution, agricultural market management, wheat policy framework, wheat economy Pakistan |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2025:48 |