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on Regulation |
| By: | Mike Eggleston |
| Abstract: | Utility cost pressures are rising, particularly for low-income households, who spend five times more on utilities as a share of income than high-income households do. |
| Keywords: | utility prices; low-income households |
| Date: | 2026–10–13 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103921 |
| By: | Leonardo Bursztyn (The University of Chicago; Department of Economics; NBER); Rafael Jiménez-Durán (Bocconi University); Aaron Leonard (The University of Chicago); Filip Milojević (Massachusetts Institute of Technology); Christopher Roth (University of Cologne; Department of Economics) |
| Abstract: | Several countries are adopting social media bans for teenagers, yet early evidence suggests limited adherence to the age-based restrictions. Such bans ask platforms to remove profitable customers and teens to give up access to their online social networks. We study an alternative regulatory regime in which platforms remain liable for teens on the adult tier but may offer a safe tier that removes restricted features, such as algorithmic feeds, while preserving interactions with their relevant network. Provision of the safe tier and enforcement are complementary: teens can adhere without giving up access to their network, and platforms can retain displaced adult-tier users as lower-margin customers. This policy design makes the teen decision to avoid the adult tier less dependent on peer dynamics and increases teen welfare for a relevant range of regulatory penalties. |
| JEL: | D18 D62 L51 L86 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-129 |
| By: | Martin Bichler; Philip Hierhager; Kassian K\"ock; Fabian Pieroth |
| Abstract: | Repeated Bertrand competition is a stringent benchmark for algorithmic pricing: in homogeneous-goods markets, standard learning procedures typically select the stage-game Nash outcome with prices near marginal cost. We show that LLM pricing agents can escape this benchmark, depending on deployment decisions. LLMs outperform standard online learners through faster adaptation, but this advantage largely disappears against full-information learners. An extracted surrogate algorithm illustrates how LLMs in specific deployments profit from regularly undercutting slower learners. Agents that post one price every period from raw market histories that include rival prices can sustain supracompetitive regimes in self-play. Agents that periodically emit probability distributions from summarized histories of their own profits instead move toward the competitive region in self-play. Markets mixing these interfaces can generate dynamic regimes in which LLMs establish a high-price anchor and regularly undercut it to capture demand. These regimes can keep both competitors' prices above marginal cost. Deployment choices shape these outcomes, shifting the focus from stationary equilibria to dynamic pricing regimes. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.21711 |
| By: | Jalabi, Sultan |
| Abstract: | This discussion paper examines the development of Syria's electricity sector before and since the fall of the Assad regime in December 2024. It also assesses what this implies for the post-war reconstruction of the electricity sector. Drawing on field research conducted in Damascus and Qamishli between August and December 2025, and using a theoretical framework that prioritises environmental sustainability and social inclusion, this paper explores opportunities and challenges for pursuing a transformative reconstruction of the electricity sector that is environmentally sustainable (prioritising renewables) and socially inclusive (participatory and affordable). The paper finds that fragmentation is a key characteristic of the energy regime in post-war Syria, materialising in recent years in three isolated electricity systems: an off-grid, generator-based system in the north-east; a Turkey-linked, semi-private supply system in the north-west; and a national-grid system in the rest of the country. Further findings highlight that the transitional government prioritised the rapid restoration of centralised, fossil fuel-based power plants over renewable energy. It restructured electricity-related public institutions according to market rules and further privatised the electricity market to attract investors, raising electricity tariffs significantly, even as 90 per cent of Syrian households live in poverty. The paper concludes that the ongoing reconstruction pathway is a state-led, market-driven and socially insensitive model. International development cooperation can help local actors bridge this gap at the legal, administrative and technical levels. At the legal and administrative levels, international development cooperation can support local efforts to develop an inclusive electricity-governance framework. To date, electricity-related rules have changed rapidly under the transitional government's top-down approach, with little transparency or community participation. At the technical level, shifting from standalone, off-grid solar systems to connected hybrid and mini-grid systems requires a targeted programme. This is an area for collaboration between the transitional government and international development cooperation. Nevertheless, closing the information gap in the electricity sector is still a key challenge for policy planning. |
| Keywords: | Conflict, Transformative Reconstruction, Electricity, Climate Change, Sustainability, Institutional Reform |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:diedps:344084 |
| By: | She, Huixin |
| Abstract: | Digital platforms display sellers' prices and collect ad valorem commissions. We study how these roles shape sellers' disclosure choices and a platform's incentives to regulate them. Sellers offer a base good and an avoidable add-on, which some consumers overlook when choosing sellers. Because commissions apply to the base good but not off-platform add-ons, add-on profit is passed through more than one-for-one into lower base-good prices, creating a competition multiplier. Hidden add-on prices can reduce efficiency while raising consumer surplus through this mechanism. A platform regulates disclosure to protect commission revenue, while mandatory transparency can improve efficiency but reduce consumer surplus. |
| Keywords: | Platform governance; add-on pricing; consumer myopia; market transparency;; ad-valorem commissions; shrouding, information disclosure |
| JEL: | D11 D21 D82 L12 L15 L81 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132263 |
| By: | Hexiao Liu; Lijian Lu; Mingzheng Wang |
| Abstract: | Digital marketplaces increasingly earn revenue from transaction commissions and seller-facing data services. Sellers may purchase data to increase revenue or avoid competing with an informed rival. We examine how consumer disclosure rights shape these motives and the platform's incentive to provide data. We develop a game-theoretic model of a commissioned platform, two differentiated sellers, and privacy-sensitive consumers. Data generates value through bilateral sales-revenue gains and competition threats arising from asymmetric access. Under mandatory collection, the platform can monetize defensive adoption, even when bilateral personalization reduces seller revenue. Under voluntary disclosure, anonymous purchasing and strictly positive privacy costs make unilateral disclosure unattractive in the baseline. Exclusive access thus yields no usable information, restores sellers' no-data rejection payoffs, and eliminates defensive fees. Profitable provision therefore requires nonnegative bilateral revenue gains. Under full fee extraction, sellers retain their no-data net profits. This revenue alignment does not guarantee welfare gains: additional transactions may benefit consumers, whereas segmentation in an already covered market can raise anonymous prices and reduce welfare. Capping anonymous offers at their no-data benchmark protects individual consumers and limits positive-mass provision to the transaction-creation region. Extensions consider access choice, heterogeneous privacy costs, imperfect identification, and limited contractual credibility. Platforms should evaluate data services based on both bilateral-use and seller-rejection outcomes, and sellers should distinguish revenue-enhancing from defensive investments. Regulators should distinguish equal-access rules from effective consumer control and monitor pricing in anonymous channels. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.22864 |
| By: | Canta, Chiara; D’Annunzio, Anna; Lefouili, Yassine |
| Abstract: | We study the impact of privacy regulation on data-driven innovation and welfare in the healthcare sector. A platform providing medical services (e.g., a hospital) collects patient data and may sell non-rival access to downstream innovators. Without data externalities, consent can induce inefficiently low data sharing because the platform cannot identify privacy-concerned patients and captures only part of the social value of innovation. Consequently, requiring consent can reduce welfare for intermediate privacy costs. When one patient’s disclosure reveals information about others, consent decisions become strategic complements. These externalities reduce the compensation required for disclosure and can instead produce excessive sharing, potentially justifying additional restrictions on compensation or data sharing. If the platform controls innovator access, consent can induce excessive restrictions without data externalities, whereas sufficiently strong externalities can lead the platform to admit too many innovators. |
| Keywords: | Data sharing; privacy; consent policy; innovation; healthcare. |
| JEL: | D83 L15 L51 |
| Date: | 2026–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132282 |
| By: | Samuel D. Hirshman; Anna Ignatenko |
| Abstract: | How do firms transmit macroeconomic shocks to consumers through retail prices? We show that pricing frictions induced by behavioral biases play a central role in shaping how cost shocks pass-through to consumers. We document that import tariffs are transmitted primarily through prices that do not end in nine, while nine-ending prices exhibit substantially lower pass-through. After the tariffs, annual inflation is meaningfully larger for non-nine-ending priced products, even products that are not tariffed. These findings identify channels through which consumer biases constrain firms' responses to macroeconomic shocks. |
| Keywords: | left-digit bias, pass-through, tariffs, behavioral pricing |
| JEL: | F13 F14 D91 L11 M31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13056 |
| By: | Khachatryan, Rubik; Lukyanov, Georgy |
| Abstract: | This paper studies how learning about an incumbent affects the scope of entry when competitive responses use resources shared across markets. An entrant chooses whether to launch in neither, one, or both of two markets. Entry into the second market reduces the incumbent’s cost-reducing response in the first and can make one-market entry unattractive. The entrant learns about the incumbent’s capability from a record of its response to an earlier rival. More frequent publication encourages a less capable incumbent to imitate a more capable one. An observed response then becomes less informative, and entry after that record expands. We compare publication of conduct with a public audit of capability. For an open set of parameters with uniform setup costs, full publication maximizes total surplus within the specified policy class when publication costs are low. Removing the interaction between response costs across markets reverses this choice, while preserving all early and singleton-market payoffs. A capability audit is dominated in both economies. Expected entry scope is constant across the considered policies within each technology, although productive investment and the allocation of entry change. |
| Keywords: | reputation; entry scope; information disclosure; competitive response; multimarket competition |
| JEL: | D82 L13 L15 |
| Date: | 2026–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132292 |
| By: | Brian Greaney; Joseph S. Shapiro; Katherine R.H. Wagner |
| Abstract: | We study the optimality of human groundwater extraction from many of the world's 3, 400 aquifers, where institutional or market failures may produce non-optimal extraction decisions. We use remote sensing and economic data to estimate a dynamic model of water extraction for each aquifer, recover the discount factor that rationalizes observed groundwater extraction, and compare it against Ramsey and market benchmarks. Three- to four-fifths of aquifers are extracted more rapidly than is optimal, decreasing aquifer present value by several percent, and creating trillions of dollars in present value welfare losses. Policies that guarantee users constant water quantities indefinitely, through subsidies or prior appropriation, or policy rules that fully discount future extraction, generate larger welfare costs. A sustainable extraction path that maintains current fill forever generates meaningfully lower welfare than the optimal extraction path, because most aquifer stocks are already inefficiently low. |
| JEL: | H23 Q25 Q50 R30 R52 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35904 |
| By: | Rey, Patrick; Iossa, Elisabetta |
| Abstract: | We study how the precision of merger review a¤ects rmsincentives to generate merger-specific efficiencies. Before the review, merging parties can invest in a project combining complementary assets; the project can be implemented only if the merger is approved. The merger control authority observes a noisy signal about these efficiencies and approves if the evidence satises a consumer-surplus standard. In a binary-investment benchmark with exogenous signal threshold, greater signal precision fosters investment incentives. The same holds locally with continuous investment and holds as well with Bayesian approval. Better information can therefore strengthen, rather than weaken, incentives to generate merger efficiencies. |
| Keywords: | merger control; investment; innovation; e¢ ciencies; information; antitrust |
| JEL: | L13 L41 O31 D82 |
| Date: | 2026–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132272 |
| By: | Chenhao Liang (Melbourne Institute of Applied Economic an Social Research, The University of Melbourne, Australia); Jongsay Yong (Melbourne Institute of Applied Economic an Social Research, The University of Melbourne, Australia); Yuting Zhang (Melbourne Institute of Applied Economic an Social Research, The University of Melbourne, Australia) |
| Abstract: | Specialist physician fees in Australia are set at the discretion of the treating physician, guided only by a non-binding government schedule fee. Using administrative data on 5.8 million initial specialist consultations in 2023/24, we risk-adjust fees for patient characteristics and decompose the residual variance into physician, specialty, and regional components using a four-level random effects model. Accounting for patient risk factors reduce the fee variance by at most 5.3%. Physician-level variation accounts for 44.6%, specialty for 22.1%, and region for 3.8%; the ranking is broadly stable across six major specialties estimated separately. These results indicate that the fee dispersion of initial consultations, which is a schedule-priced, largely homogeneous service, is driven predominantly by physician-specific pricing discretion rather than by patient need, specialty norms, or geographic market conditions. We discuss implications for fee regulation and price transparency policy. |
| Keywords: | physician pricing, fee variation, variance decomposition, out-of-pocket costs, price transparency, Medicare |
| JEL: | I11 I18 D40 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:iae:iaewps:wp2026n18 |
| By: | Xiaonan (Flora) Ma; Raluca Roman; Aditi Routh |
| Abstract: | Prohibiting payday lending can reduce complaints to the Consumer Financial Protection Bureau by 90 percent. |
| Keywords: | Payday lending; Consumer Financial Protection Bureau; CFPB; Consumer financial regulation; Consumer complaints; Complaint resolution; Financial spillovers; Cross-market spillovers; Debt collection; credit reporting; Household finance; banking market structure |
| JEL: | G21 G28 G51 D14 D18 K23 |
| Date: | 2026–10–13 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedkrw:103924 |
| By: | Giannakas, Konstantinos |
| Abstract: | This paper develops a multi-market framework of analysis of vertical relationships in pork production and game theoretic models of heterogeneous firms to examine the economic, market and welfare impacts of abolishing vertical integration in the US pork sector. Different scenarios on the causes of vertical integration and the potential states of nature that can emerge after the removal of this vertical market arrangement are considered within this framework. Analytical results are consistent across the different scenarios and forms of strategic interactions between pork producers and indicate that the abolishment of vertical integration in the US pork sector will hurt pork consumers, integrated pork producers and the hog producers involved. The only beneficiaries of this policy/change will be the non-integrated pork producers. However, the gains of these non-integrated pork producers are less than the consumer, hog producer and integrated pork producer losses, resulting in net social welfare losses from this policy. |
| Keywords: | Livestock Production/Industries |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:nbaesp:413438 |
| By: | Faïk, Emmanuel; Vergote, Olivier |
| Abstract: | This paper quantifies the regulatory cost of short-term money market transactions and analyses how post-global financial crisis prudential reforms shape the structure of euro area money markets and the redistribution of central bank reserves. As the stock of reserves declines with the normalisation of the European Central Bank’s balance sheet, trading in money markets is becoming increasingly important to banks’ liquidity management. As the related money market volumes rise, regulatory constraints may become a more visible determinant of trading activity and short-term rate formation. Focusing on key Basel III requirements – the liquidity coverage ratio, net stable funding ratio and leverage ratio – the paper derives stylised estimates of the marginal regulatory cost associated with unsecured and secured interbank transactions. The results indicate that unsecured interbank lending entails material regulatory costs, estimated at around 35 basis points for lenders and around 15 basis points for borrowers in the second half of 2025, reflecting capital and stable funding requirements. By contrast, secured transactions such as repurchase agreements benefit from substantially lower costs, typically well below 10 basis points when backed by high-quality collateral. These differences create structural incentives favouring secured over unsecured intermediation, suggesting that repo markets are likely to remain the main channel for reserve redistribution as the stock of reserves declines. The findings imply that post-crisis regulation has contributed to a persistent shift in the structure of euro area money markets, with implications for liquidity distribution and monetary policy implementation. JEL Classification: E43, E52, E58, G21, G28 |
| Keywords: | bank regulation, liquidity regulation, monetary policy implementation, money markets, repo markets |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2026401 |
| By: | Guillaume Chapelle; Julia Paul-Venturine; Camille Urvoy (CY Cergy Paris Université, THEMA) |
| Abstract: | When a national government relaxes a local regulation, do local ocials comply, or find other ways to keep the same rules in place? We study a 2014 French reform that abolished floor area ratios (FAR), a widely used cap on building density, with the explicit goal of expanding housing construction. We assemble a new geospatial panel tracking three zoning tools floor area ratios, building heights, and coverage ratios | over 15 years across 118 municipalities in the Paris region, linked to building permits, housing stock, and transaction prices. Comparing municipalities where FAR existed before the reform to those where it did not, we show that local governments o set the deregulation by tightening the two instruments they retained: maximum heights fell, coverage ratios tightened, and permit denials rose. Density did not increase in previously regulated areas, and we detect no e ect on prices, consistent with the limited change in supply. The regulatory tightening was strongest where mayors faced closer elections and where property values are higher, not where mayors belong to parties opposing the reforming government, pointing to electoral accountability rather than partisanship. Top-down deregulation can therefore be substantially undercut when local governments retain complementary instruments, suggesting reforms must either limit local discretion directly or realign local incentives. |
| Keywords: | Decentralization, Fiscal federalism, Local political incentives, Upzoning, Land use regulations |
| JEL: | H77 R52 R38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ema:worpap:2026-12 |
| By: | Jacob Goldin (The University of Chicago; University of Chicago Law School; NBER); David Weisbach (The University of Chicago) |
| Abstract: | Line drawing is a pervasive feature of legal systems. Across many domains, the applicable legal treatment turns on whether an activity falls above or below some threshold. We characterize the economic forces that determine the optimal placement of such thresholds, both generally and in specific legal settings involving monetary and non-monetary sanctions, prohibitions, and mandates. We apply our results to two important line-drawing questions in private law: the optimal due-care threshold for negligence liability and the optimal threshold for whether a shortfall in contract performance constitutes breach. In both applications, the optimal line takes the form of a population-level marginal cost-benefit rule, with the relevant costs and benefits weighted over the actors whose behavior the line induces to change. |
| JEL: | H0 K1 K12 K13 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-128 |