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on Regulation |
| By: | Tomás Marotta (Universidad de San Andrés); Tomás Pacheco (Universidad de San Andrés); Abigail Riquelme (Universidad de San Andrés); Martín Rossi (Universidad de San Andrés); Federico Sturzenegger (Universidad de San Andrés) |
| Abstract: | We examine how well-intentioned regulations often produce adverse economic and institutional consequences. While regulation can address market failures, it frequently evolves into a tool for rent-seeking, exclusion, or symbolic overreach. Using case studies from Argentina’s deregulation process, we show how rigid or discretionary rules can reduce competition, increase prices, and distort incentives. Beyond these partial-equilibrium effects, we examine whether deregulation can generate broader, economy-wide impacts through institutional channels. Argentina’s economy-wide deregulation provides a unique setting to assess these systemic effects. We document a marked post-reform decline in corruption indicators relative to comparable countries, consistent with the idea that simplifying rules and reducing regulatory discretion can lower rent-extraction opportunities and improve institutional performance at scale. Taken together, the findings underscore the need for responsible deregulation: a reform agenda focused on removing unjustified barriers, curbing discretion, and restoring state capacity through evidence-based, transparent, and regularly reviewed regulatory frameworks. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:sad:wpaper:175 |
| By: | Alessandro Petretto |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2025_19.rdf |
| By: | Burga, Carlos; Cespedes, Jacelly; Parra, Carlos R; Cerón, Marcos; Quispe, Isaí |
| Abstract: | Instant payment systems have rapidly gained global traction by enhancing transaction efficiency, yet evidence remains limited on how their designparticularly interoperabilityshapes market structure. We exploit Perus 2023 interoperability mandate as a quasi-natural experiment using a difference-in-differences design. Mandated interoperability increased deposit market concentration by approximately 2%. Incumbent banks linked to the dominant digital wallet expanded their deposit market share by nearly 10% and reduced deposit interest rates by 5080 basis points. We also observe more branch closures in high-adoption areas and declining microcredit. A model explains these results through an “amenity shock, ” boosting digital wallet convenience for all adopters. Due to network externalities, the largest incumbent wallet captures a disproportionate share of new users in dual-platform markets an “amenity effect” that ultimately increases concentration. By contrast, in single-platform regions, interoperability lowers barriers for new providers an “entry effect” that spurs competition and erodes incumbent dominance. Our results show that this amenity effect in dual-platform cities outweighs the entry effect elsewhere. Overall, our findings show competitive effects of interoperability mandates critically depend on initial market structure and distribution of platform market shares. |
| JEL: | E42 J31 O33 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14435 |
| By: | Xiang-Li Lim; Puja Singh; Richard Stobo |
| Abstract: | This paper examines the uptake of AI in securities markets and recent approaches to its regulation and supervision, complementing work by IMF and standard setters’ initiatives. It highlights the adoption of AI across financial services, the growing use of GenAI, and the associated risks, including data, performance, new cybersecurity threats, and broader financial stability risks. While AI offers benefits, its adoption warrants caution given the potential for material risks that could undermine financial sector’s reputation and soundness. The paper highlights how authorities are responding, providing a stocktake of regulatory and supervisory developments. While the paper compares advanced economies (AEs) and emerging markets and developing economies (EMDEs), it highlights the significant heterogeneity within EMDEs, in terms of technology adoption and capacity. Finally, the paper summarizes key take-aways and identifies practices that authorities could consider adopting as part of their supervisory frameworks. |
| Date: | 2025–12–24 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2025/016 |
| By: | Gorecki, Paul |
| Abstract: | Ireland’s national competition authority has recently increased scrutiny of mergers using Assessments (aka Statement of Objections). Despite using this approach, the authority’s 2023 determination of the proposed acquisition by Q-Park of Tazbell is fatally flawed. The authority had competition concerns in three local markets for the supply of off-street car parking spaces to the public. The transaction was cleared with remedies. The paper argues that there was no substantial lessening of competition. The remedies were inadequate. Why? Contributing factors include lack of coherence reflecting confirmation bias. Merger control can be improved by, inter alia: increasing the number of CCPC executive board members to reduce governance overload; and encouraging diverse internal views and peer review through the appointment of a chief economist. The paper forms part of a broader critical narrative of merger control in Ireland. |
| Keywords: | mergers; structural remedies; substantial lessening of competition; critical loss analysis; and Competition Act 2002; car parking. |
| JEL: | D22 D43 K21 L41 R4 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127352 |
| By: | Mahirah Mahusin (Economic Research Institute for ASEAN and East Asia (ERIA)); Hilmy Priliadi (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | Source code underpins digital technologies and is typically protected as commercially sensitive intellectual property. While free trade agreements (FTAs) increasingly prohibit mandatory source code disclosure as a condition for market access, governments continue to require access in specific circumstances, including regulatory oversight of algorithmic systems, conformity assessments, law enforcement, and public procurement. Across ASEAN, member states have adopted diverse approaches. These include Indonesia's public procurement requirements, Malaysia's provisions allowing access in criminal investigations, and Thailand's safeguards under trade secret law. Recent FTAs reflect a shift from broad, categorical prohibitions towards more nuanced frameworks that permit regulatory exceptions, raise questions regarding the treatment of algorithms, and preserve space for voluntary disclosure. As ASEAN advances negotiations on the Digital Economy Framework Agreement (DEFA), source code provisions will need to strike a careful balance between protecting innovation and maintaining regulatory and judicial flexibility. This Policy Brief recommends affirming baseline prohibitions on forced disclosure, clearly safeguarding legitimate government access, clarifying the treatment of algorithms, protecting voluntary disclosure, and addressing implications for public procurement. Latest Articles |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:pb-2025-15 |
| By: | Silke Johanndeiter; Jonas Finke; Justus Heuer |
| Abstract: | Weather, technological and regulatory uncertainties expose actors in highly renewable electricity markets to substantial price and volume risks. Two-way Contracts for Difference (CfDs) can mitigate these risks. They stipulate payments between the government and generators of renewable electricity based on the difference of a strike and a reference price, whose definition and unit of payment differ between CfD designs. We study the effect of three different CfD designs on wind power profit and consumer price volatility under the consideration of uncertain market outcomes in a highly renewable, sector-coupled electricity market. First, we analytically derive optimal strike prices under uncertainty. Second, we numerically determine optimal strike prices based on market expectations retrieved from optimising a set of 36 market scenarios in an energy system model. Third, we study the distribution of ex post market revenues, CfD payments and consumer prices across all 36 scenarios. Compared to purely market-based consumer prices and investor profits, we find all CfDs to significantly reduce volatility. For consumer prices, results show no substantial differences between CfD designs. For investor profits, we identify the highest volatility reduction under a capacity-based CfD with a reference price similar to power plants' individual market revenues. Since such a CfD design is known to diminish the effect of price signals on investment decisions, our results reveal a trade-off between incentivising system-friendliness and reducing investor risk. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.17508 |
| By: | Yu Hao |
| Abstract: | This paper examines how regulation can push an oligopoly from one pricing regime to another. It uses rich data from Chilean pharmacy chains to study a ban on comparative price advertising. Before the ban, ads created demand spillovers across products, making aggressive loss-leader pricing profitable. Once these spillovers were removed, selling below cost became unattractive for any firm, and prices quickly shifted to a coordinated, higher level. A structural demand model shows that the ban reduced both price elasticity and cross-product spillovers, and counterfactuals indicate that the loss of spillovers, rather than just lower elasticity, mainly explains the move to the new coordinated pricing regime. The results show how well intentioned regulation can unintentionally promote price coordination by weakening the mechanisms that support competitive outcomes. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.22917 |
| By: | Bach-Mortensen, Anders; Goodair, Benjamin; Petersen, Ole Helby; Kvist, Jon |
| Abstract: | Like many other countries, Denmark has recently seen a sharp increase in outsourced social service provision for children and adults. While quasi-market theory suggests that complex social services could be ill-suited to market provision, there has been little assessment of how ownership relates to service quality for welfare services due to fragmented data. This paper presents findings from a population-wide analysis of quality and inspection outcomes across public, non-profit, and for-profit providers in Denmark's social services for children and working-age adults with support needs, including children's homes and adult residential facilities (N = 2375, 2020-2024). First, we document a 44.1 % increase in for-profit providers over five years (2020-2024), while public and non-profit provision remained stable or declined. Second, for-profit providers were significantly more likely to receive regulatory sanctions, including intensified monitoring and forced closure compared to other ownership types. Third, non-profit providers received higher quality ratings, while newer for-profit entrants underperformed relative to both public and older for-profit providers. Fourth, quality and regulatory differences were most pronounced between for-profit and not-for-profit providers rather than between public and private providers, indicating that ownership form and the profit-motive within the private sector matters more than the public-private distinction. These findings support theoretical claims that welfare markets for complex social services are prone to market failure due to information asymmetries, user complexity, and incomplete contracts. Finally, the findings have policy implications for market regulation, procurement and pricing strategies in terms of how to sustain high-performing providers in an increasingly marketised social service landscape. [Abstract copyright: Copyright © 2025 The Authors. Published by Elsevier Ltd.. All rights reserved.] |
| Keywords: | outsourcing; Nordic welfare state; social services; welfare marketisation; privatisation; ownership |
| JEL: | E6 |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130825 |
| By: | Elena Prager |
| Abstract: | Until recently, antitrust laws were rarely enforced in labor markets. Although the existence of labor market power has long been recognized, evidence only recently emerged that such market power regularly arises from sources that are actionable under antitrust law. Since 2010, antitrust agencies have substantially increased labor market enforcement actions. However, many questions relevant to enforcement remain unanswered, such as how to conduct market definition for labor markets, and how best to incorporate concentration into models of the labor market. This article reviews how antitrust is beginning to be used in labor markets, the evidence for and against its use, and the remaining evidence gaps standing in the way of more effective use. |
| JEL: | J42 K21 L4 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34572 |
| By: | Tinnefeld, Vicky; Kesternich, Martin; Werthschulte, Madeline |
| Abstract: | Urged by the European Energy Crisis and the threatening consequences of severe natural gas shortages, energy providers launched gas-saving initiatives incorporating financial incentives to reduce residential natural gas consumption. In collaboration with one of Germany's largest energy providers, we conducted a natural field experiment (N = 2, 598) to evaluate the effectiveness of a behaviorally-guided co-design of such a gas-saving initiative by implementing two established behavioral instruments - reminders of gas saving intentions and descriptive norm feedback. Our findings show limited effectiveness of the behavioural instruments during the high-price period. The feedback risks a "boomerang effect" among households with above-average initial savings, who reduce their conservation efforts in response. The reminder does not significantly enhance savings in our main specifications, yet, realizes 1 percentage point savings in alternate models refining for outliers. Potential mechanisms include a significant intention-action gap and misperceived effectiveness of energy-saving actions, which are not alleviated by the reminder. |
| Keywords: | Residential energy savings, energy crisis, behavioral interventions, survey data, field experiment |
| JEL: | C93 D04 D91 Q41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:333899 |
| By: | Rosokha, Yaroslav; Wu, Steven Y. |
| Abstract: | Behavioral nudges have come under recent scrutiny due to meta-analyses showing that the impact of nudges may be over-stated in academic studies relative to scaled nudges conducted by government nudge units. Unfortunately, the economics literature provides few, if any, theoretical mechanisms for understanding the limits of behavioral nudges. We develop a theoretical model, which examines behavioral nudges from the perspective of an incentive design problem, where discrete choice architecture strategies are used rather than monetary incentives. We propose that nudge incentive power should satisfy incentive compatibility conditions. This provides researchers with a clear theoretical mechanism for understanding when we should expect nudges to induce a response and when they might have muted effects across different contexts. We also highlight that when the social planner has a “common value” payoff function and consumers are heterogeneous, even a nudge that appears successful in inducing a response at the population level may not increase welfare. This is because a nudge is likely to induce a larger response from non-targeted subgroups rather than the targed subgroup. This creates an illusion of success where distortions are created with the non-targeted group while generating only weak or no response from the targeted group. Finally, we show that an optimal monetary based contract can induce targeted subgroups to respond while not creating distortions by the non-targeted subgroup. |
| Keywords: | Institutional and Behavioral Economics |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360714 |
| By: | Smolenska, Agnieszka |
| Abstract: | Polycentric governance is a trust-intensive and trust-dependent governance that should actively seek to build and restore trust. The different ways in which this is done are poorly understood. Our study of the environmental, social, and governance (ESG) strategies and the green transition clarifies the role of enhanced self-regulation and intermediaries in trust-building and trust-repair in polycentric governance. ESG rating providers as intermediaries may help to build and repair trust, but as with any trustee, they represent a trust challenge as well. This article addresses these issues and is organized around three major questions: First, what are the political dynamics around the adoption of the rules for ESG ratings providers in the EU and United Kingdom? Second, what are the differences between the trust-building and the trust-repair strategies deployed? Third, how do these differences reflect the different approaches to the trust challenges of regulation by and of intermediaries? We apply process tracing and a comparative analysis of the regulation of ESG rating providers to generate insights into the trust-building and trust-repair strategies of rule-makers. Our analysis leads us to identify varieties of enhanced self-regulation that are differentiated by the regulatory strategies adopted by the rule-makers vis-à-vis regulatory intermediaries. We show how such efforts may combine different elements of mandatory and voluntary regulation, and we shed light on the differentiated conceptualizations and complexities of the function of trust in polycentric governance regimes as a whole. |
| Keywords: | enhanced self-regulation; ESG; greenwashing; regulatory intermediaries; sustainable finance; trust; trust-repair; varieties of self-regulation |
| JEL: | R14 J01 N0 |
| Date: | 2025–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130609 |
| By: | Ruixue Jia; David Strömberg |
| Abstract: | Moral regulation is widespread across societies, yet its consequences have seldom been examined empirically. We study the Hays Code (July 1934–1960s), which imposed systematic moral guidelines on American cinema. Using a regression-discontinuity design, with non-U.S. films providing a comparison group, we find that the moral compliance of U.S. films rose sharply after 1935 and remained high for two decades. The Code also reshaped protagonists and political tone: protagonists became less likely to be women or working class, and political tones grew more conservative. Filmmakers adapted both by increasing compliance within genres and by shifting across them: less-compliant Drama declined while more-compliant Western and Action rose. Companies with a larger market size and immigrant film directors exhibited stronger responses. These findings reveal how moral constraint, market, and identity jointly shape cultural production and how well-intentioned moral regulation can generate broad and often unintended spillovers. |
| JEL: | L51 L82 N72 P16 Z11 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34539 |