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on Regulation |
| By: | Hattori, Keisuke; Yoshikawa, Takeshi |
| Abstract: | Manufacturers rely on retailers both to sell their products and to create demand. Investment in demand creation can reverse the usual profit effects of retail entry on manufacturers and incumbent retailers. As the network grows, the manufacturer invests more and each retailer invests less. Entry can reduce the manufacturer's profit despite a higher wholesale price and greater sales, or increase incumbents' profits through savings on investment costs. When investment is sufficiently effective, the manufacturer prefers a finite network even when adding retailers is costless. Cheaper manufacturer investment expands its preferred network, whereas cheaper retailer investment contracts it and can reduce sales and consumer surplus. With identical investment technologies and finite optimal networks, the manufacturer's network is no larger than the socially optimal network; with different technologies, this ordering can reverse. The welfare consequences of distribution limits therefore depend on which firms create demand and bear its cost. |
| Keywords: | Demand creation, Distribution networks, Investment spillovers, Vertical restraints, Profit-increasing entry |
| JEL: | L13 L14 L42 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:344260 |
| By: | Makoto WATANABE; Patrick Arnold; Marc Möller |
| Abstract: | This paper considers the effects of common ownership on advance purchase markets featuring intertemporal price discrimination (e.g. airline tickets). Common ownership increases advance prices, while spot prices can decrease. We show that common ownership is anticompetitive but the increase in average transacted prices is smaller than under uniform pricing, although consumers shift towards more informed, more expensive purchases. Common ownership is less detrimental for consumers than under uniform pricing and can even benefit consumers when consumers are sufficiently uninformed about their preferences in advance. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:26-020e |
| By: | Lim, Heehyun; Chung, Sunghoon |
| Abstract: | Greater urgency in renewable expansion has driven a corresponding rise in the cost of policy incentives. Can the rollout be accelerated while enhancing policy efficiency? This analysis finds that the current RPS-REC scheme clears only a baseline cost-benefit test, leaving room for improvement. Interlocking bottlenecks in grid connection and financing slow renewable deployment and risk eroding the cost-effectiveness of subsidies. Achieving both speed and efficiency will require coordinated progress on three fronts: rationalizing subsidy design, expanding grid infrastructure, and improving financing conditions. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kdifoc:344284 |
| By: | Lion Hirth |
| Abstract: | Studies on price-optimized EV charging consistently find that the common price signal synchronizes charging of the entire fleet of cars in the cheapest hours and creates new "rebound" load peaks in low-voltage grids. Almost all of these studies treat wholesale prices as exogenous, i.e., unaffected by the shifting EV load. This paper argues that this assumption overstates the problem: charging in low-price hours raises the wholesale price in those hours, which spreads charging across hours in equilibrium. I simulate price-optimized charging under real-time prices calibrated to German 2025 data. Even when adjusting for the increase in electricity demand, the coincident import peak of the local grid rises by 260%. After adding a model of equilibrium wholesale prices that takes the price-quantity feedback into account, the increase is reduced to a mere 5%. Allowing for vehicle-to-grid, the export peak rises by 115% and falls by 6%, respectively. The result holds across vehicle and charging parameters, charging constraints, renewable scenarios, network charges, price functions, peak measures, and simulation assumptions. Rebound peaks remain possible where vehicle adoption runs ahead of the national average or where charging power is high, but they are much smaller than the literature consensus suggests. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.34133 |
| By: | Khanna, Shefali; Martin, Ralf; Munch, Florian; Saussay, Aurelien |
| Abstract: | We study how local supply shapes the incidence and quantity response of clean-technology subsidies. In October 2023, the UK government increased the grant for air-source heat pumps from #5, 000 to #7, 500 in England and Wales, while Scotland left its policy unchanged. Using 260, 000 certified heat pump installation records in a difference-in-differences comparison of Northern England with Scotland, we find that the grant increase raised monthly installations by 24%, adding roughly 7, 200 units over 20 post-reform months. Reported pre-grant installation costs fell by about #830, so household out-of-pocket payments declined by more than the #2, 500 grant increase. The quantity expansion and the cost reduction were larger in local areas with more competition prior to the policy. Supply adjusted through local installer entry, wider geographic reach among existing installers, and a shift toward smaller, higher-efficiency heat pumps. While changes in heat pump size and model mix explain roughly half of the unconditional cost drop, within-installer-and-model price cuts account for a quarter of the average decline and half of the additional price drop in more competitive markets. Combining these estimates with engineering-based carbon abatement yields a marginal value of public funds of 2.1, rising to 2.5 in markets one standard deviation above mean competition. |
| Keywords: | subsidy incidence;pass-through;imperfect competition;technology adoption;heat pumps |
| JEL: | N0 R14 J01 |
| Date: | 2026–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141794 |
| By: | Illenseer, Niklas; Heilmann, Felix; Kölzer, Valentin; Steitz, Janek |
| Abstract: | Alongside its Electrification Action Plan, the European Commission proposed that member states tax electricity no more heavily than gas. This paper assesses how cutting electricity taxes to that level, or to the EU minimum, affects bills, electrification incentives and public budgets. Only about a third of EU member states tax electricity more than gas, so the Commission's proposed parity rule would only affect these countries. An in-depth analysis of seven member states shows that the effects of a cut vary widely. Electricity taxes account for around 0.5 to 14 percent of electricity prices for a typical family household in the sample, so a cut noticeably lowers bills only where that share is high. Relief goes mainly to households and smaller businesses that do not yet benefit from exemptions. It strengthens electrification incentives only where the electricity-to-gas price ratio is also high. For the public budget, revenue losses dominate at first, but electrification can improve the fiscal balance over time through lower exposure to fossil fuel price shocks and avoided climate damages. Targeted cuts can deliver electrification benefits at a lower fiscal cost than a general cut and are already possible, but legal reforms to simplify their use would be desirable. |
| Abstract: | Mit dem Electrification Action Plan schlägt die Europäische Kommission vor, dass Mitgliedstaaten Strom nicht höher besteuern als Gas. Wir untersuchen, wie eine Senkung der Stromsteuer auf dieses Niveau, oder auf das EU-Minimum, Stromkosten, Elektrifizierungsanreize und Staatshaushalte beeinflusst. Nur etwa ein Drittel der Mitgliedstaaten wäre von der Regel betroffen. Die Analyse von sieben Ländern zeigt große Unterschiede zwischen den EU-Staaten: Die Stromsteuer macht für einen typischen Familienhaushalt 0, 5 bis 14 Prozent des Strompreises aus. Spürbar sinken die Rechnungen dort, wo dieser Anteil hoch ist. Entlastet würden vor allem Haushalte und Unternehmen, die nicht unterbestehende Ausnahmeregeln fallen. Die Senkung schafft dort Anreize zur Elektrifizierung, wo auch das Verhältnis von Strom- zu Gaspreis hoch ist. Im Staatshaushalt überwiegen zunächst die Steuerausfälle. Mit der Zeit kann die Elektrifizierung die Bilanz aber verbessern, weil fossile Preisschocks weniger durchschlagen und Klimaschäden vermieden werden. Gezielte Senkungen sind günstiger als eine allgemeine und schon heute möglich. Idealerweise sollte ihre Anwendung aber durch eine Reform der EU-Energiesteuerrichtlinie vereinfacht werden. |
| Keywords: | Electricity Tax, Electrification, Energy Taxation, Fiscal Policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dzimps:344349 |
| By: | Rosino, Maria Victoria; Scartascini, Carlos |
| Abstract: | How citizens want artificial intelligence (AI) regulated will shape which AI governance instruments are politically feasible. Yet we know little about public preferences over AI policy in middle-income democracies, where state capacity is contested. This paper provides the first multi-country experimental evidence on preferences over AI labordisplacement policy instruments in middle-income democracies. Using a randomized framing experiment in a sur-vey of Argentina, Brazil, Colombia, and Mexico, we examine how citizens map beliefs about AI-driven job disruption into demand for three governance responses: worker-retention reg-ulation, tax-financed redistribution to displaced workers, or non-intervention. Nearly three-quarters of respondents prefer employment-preserving regulation, about one in twenty favors tax-financed redistribution, and one-fifth prefer nonintervention. A three-arm framing taxonomy spanning alarmist, delayed-threat, and task reallocation narratives produces no average shift in this distribution, and the heterogeneous effects we detect at the margin run from non-intervention toward regulation, not toward redistribution. The pattern is consistent with preferences anchored in priors about the state's redistributive capacity rather than in correctable beliefs about AI, with direct implications for AI governance design in low-credibility institutional environments. A within-survey wording experiment on employment protection regulation elicits a substantial shift in preferences among the same respondents, indicating that the null on the AI framings is not an artifact of respondent inattention. |
| Keywords: | regulation;employment protection;Trust;Survey experiment;AI governance;Labor Market Regulation;Public Opinion;Framing Experiment |
| JEL: | D72 D83 J38 O33 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14824 |
| By: | Michelangelo Rossi; Adèle Diehl; Louis-Daniel Pape |
| Abstract: | Integrating generative AI into digital platforms may reshape competition among AI assistants. We study whether Google’s introduction of AI Mode within Search reduces traffic to competing services. We exploit the August 2025 expansion of Google’s AI Mode, which reached 25 sample countries, using website traffic estimates for ten AI assistants and a difference-in-differences design with 30 countries where AI Mode was unavailable. Making AI Mode available within Google Search reduced ChatGPT website visits by 5.9 percent over the first four weeks, implying 3.5 million fewer daily visits across treated countries. The decline is concentrated in direct visits, while organic-search referrals change little. Daily unique visitors decline by a similar proportion, with little change in visits per daily visitor or average visit duration, suggesting the reduction primarily reflects lower daily reach. Point estimates remain negative throughout the 40-day follow-up, after which comparison countries also gain access to AI Mode. We find no statistically significant average effect on Gemini or the eight smaller assistants combined over the first four weeks. These findings suggest integrating conversational AI into established search interfaces can reduce traffic to standalone competitors, highlighting distribution channels’ importance for competition among AI assistants. |
| Keywords: | generative AI, search engines, platform integration, platform competition |
| JEL: | L13 L86 M31 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13098 |
| By: | Choi, Juyoung; Yu, Jisang; Cho, Jihoon |
| Keywords: | Food Consumption/Nutrition/Food Safety |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:417298 |
| By: | Chao Huang |
| Abstract: | In a market in which any coalition can reach agreements, a stable outcome need not exist even when agents have substitutable preferences. We show how regulation can restore stability. If a regulator participates in every agreement, a setwise stable outcome exists when each ordinary agent's preference satisfies a condition weaker than substitutability, while the regulator's preference remains largely unrestricted. An alternative existence result allows ordinary agents to have arbitrary preferences while requiring the regulator to support each agent's profitable contract deletions. Our results apply to matching markets involving regulated activities. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.34412 |
| By: | Bunting, W.C. |
| Abstract: | This Article explores how the anticompetitive impact of a zoning ordinance is assessed under the antitrust laws and substantive due process and concludes that neither is likely to satisfactorily curb the anticompetitive impact of commercial land use regulation. The Article highlights the distinction between a local government’s zoning power and its more general police power. For rational basis review to act as a meaningful check on zoning power, as distinguished from more general police powers, this Article contends that such review must require a local government to produce evidence of a causal link between the zoning action and the stated government interest. Rejecting antitrust law as the proper doctrinal vehicle through which to curb the anticompetitive impact of commercial zoning restrictions, this Article proposes a three-part administrative procedure, grounded in notions of due process and the legitimate exercise of a locality’s zoning power, to reduce the frequency with which local governments impose socially inefficient restrictions on commercial land use. Finally, the Article introduces the concept of an economic impact statement. |
| Date: | 2026–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:lawarc:h5n6w_v1 |
| By: | Mocsary, George A. |
| Abstract: | Some state insurance regulators have been using their regulatory muscle to coerce insurers into furthering their political ends. They have protected favored but harmful commercial activity and have strangled legal but disfavored individual conduct. In the process, those regulators have disabled the benefits that a properly functioning insurance market can provide. They have hampered individuals’ ability to engage in desirable activities, like home ownership, that would otherwise be too risky given their incomes; they have made socially desirable but not risk-free activities, like responsible firearm ownership, less safe; and they have deprived the market of data on safety and risks. Such use of government power to abuse an “outgroup” for the benefit of the “ingroup” can also have devastating effects on social stability. This Article analyzes the situation through two case studies and suggests solutions that preserve near-plenary state control over insurance under the McCarran-Ferguson Act while limiting state regulators’ ability to abuse this special federal-state arrangement. |
| Date: | 2026–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:lawarc:bjfpw_v1 |
| By: | Javier D. Donna (University of Miami-Rimini Center for Economic Analysis); Marit Hinnosaar (University of Nottingham - CEPR); Toomas Hinnosaar (University of Nottingham - CEPR); André Trindade (Nova School of Business and Economics) |
| Abstract: | In 2019, North Dakota repealed its Sunday closing law, which had required most non-grocery stores to close between midnight and noon. Using this policy change and consumer GPS data, we study the impact of opening hours on shopping behavior and welfare. We compare visits before and after the repeal in North Dakota and neighboring states using difference-in-differences and event-study designs. The repeal caused a large increase in Sunday morning visits, originating partly from intertemporal, store-type, and cross-border substitution. The closing law’s welfare loss is equivalent to increasing the travel distance to affected stores by about 1.4 miles per consumer. |
| Keywords: | consumer behavior, opening hours, store choices, deregulation, GPS data |
| JEL: | L81 L51 D12 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:411 |