|
on Regulation |
| By: | Doyle, Christopher |
| Abstract: | Capacity markets are increasingly used to secure electricity-system reliability, but their auction designs raise persistent concerns about market power. This paper examines strategic capacity withholding in the British Capacity Market, which procures future capacity through a three-stage process: pre-qualification, disclosure of aggregate qualified supply, and a descending-clock auction with a uniform clearing price. We develop a formal model in which a small number of large portfolio bidders interact with a competitive fringe of uncertain size. The central result is that the same auction rule generates different observable forms of market power depending on bidders’ information about fringe supply: under full information, strategic bidders withhold capacity ex ante by limiting entry at pre-qualification, with no subsequent withdrawal; under imperfect information, capacity may instead be withdrawn after disclosure or during the clock auction as bidders update beliefs about market tightness. The absence of visible in-auction withdrawal is therefore consistent with maximal strategic withholding rather than competitive behaviour. We further derive a closed-form threshold for the per-unit cost of withdrawal: withholding remains profitable even under substantial institutional frictions, and the threshold rises with portfolio size and with the spread between clearing prices in tight and loose market conditions, so strategic withholding is strongest precisely when reliability conditions are most stressed. We relate the framework to recent GB auction outcomes and develop a stage-specific policy taxonomy, highlighting the role of contestability-enhancing reforms alongside direct auction mitigation. |
| Keywords: | auction design;capacity markets;capacity withholding;descending clock auctions;market power;electricity market regulation |
| JEL: | D44 L94 Q41 |
| Date: | 2026–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:139055 |
| By: | Stephen Littlechild; Ross Baldick |
| Keywords: | Transmission planning, CREZ, ERCOT, renewable energy zones, negotiated settlements, cost allocation, anticipatory investment |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2616 |
| By: | Pandey, Aarni; Ganjoo, Ananta |
| Abstract: | The rapid proliferation of digital platforms has fundamentally disrupted the competitive landscape, exposing the structural inadequacies of traditional antitrust reforms that were designed for industrial-era markets. This paper examines the evolving intersection of antitrust law, technological advancement and innovation policy in the context of modern digital economies. Drawing on a comprehensive review of regulatory developments across major jurisdictions, including the United States, the European Union, China and India, the study analyses how legacy antitrust doctrines have struggled to address the complex characteristics of digital markets, including network effects, data-driven market power, zero-price services, and winner-takes-all dynamics. The paper identifies a critical tension at the heart of digital antitrust reform: the imperative to prevent monopolistic entrenchment by dominant gatekeepers, while simultaneously preserving the conditions for dynamic innovation that drives technological progress. Through an analysis of four core themes: the Regulation of Antitrust Laws in Digital Economies, Impact of Antitrust reforms on innovation, Evolution of Antitrust reforms with technological advancement and What adaptive regulation looks like, this paper constructs a multi-layered understanding of what antitrust reform looks like. The findings suggest that ex-ante regulatory instruments, such as the EU Digital Markets Act, represent a paradigm shift from reactive, litigation-based enforcement towards forward-looking structural obligations on designated gatekeepers. While such mechanisms offer greater predictability and speed, they also risk over-regulation and innovation deterrence if not calibrated with precision. The paper argues for a hybrid regulatory architecture, one that combines robust ex-ante obligations with flexible ex-post enforcement, interoperability standards, and evidence-based threshold criteria to achieve a sustainable equilibrium between competitive markets and an innovation-enabling environment. |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:lawarc:dk8sp_v1 |
| By: | Brunninger, Lukas; Dertwinkel-Kalt, Markus; Gugler, Klaus; Heim, Sven |
| Abstract: | In the aftermath of the Russian invasion in Ukraine and rising gas prices, the ``gas price brake'' was implemented in Germany. We employ a difference-in-differences approach and analyze data on offered gas contracts from two countries with comparable gas markets, where one country (Germany) has implemented the gas price brake and the other (Austria) has not. Our findings support the theoretical prediction, indicating that the gas price brake led to an increase in total annual gas costs in Germany. This increase is entirely attributable to incumbents increasing counterfactual gas prices by up to 90\%. Non-incumbents do not ’milk‘ the brake. |
| Keywords: | Energy policy; Gas Price Brake; Moral hazard; Incumbents |
| JEL: | D04 Q40 Q48 L50 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19763 |
| By: | Heidhues, Paul; Johnen, Johannes; Köszegi, Botond |
| Abstract: | We investigate the effects of consumer-protection regulations limiting post-purchase harm when there are many markets and consumers have limited attention to examine prices or product features. Such regulation lowers the attention necessary for valuable purchases, which can allow a consumer to purchase in more markets, or serve to induce competition. The first benefit is most important when few markets are regulated, while the second emerges when regulatory scope is sufficiently broad to create “spare†— i.e., in equilibrium unused — attention. Because little spare attention can enforce competition in many markets, consumer welfare can be highly non-linear in regulatory scope. The benefits of regulating a market often accrue in other markets, and there is a sense in which overly tight regulation outperforms overly lax regulation. Broad consumer protection can help the economy reach productive efficiency, and when this is achieved less regulation may suffice. |
| Keywords: | Consumer protection; Regulation; Competition; Participation; Limited attention |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19560 |
| By: | Peter Kudela; Tomas Havranek; Zuzana Irsova; Anna Kudelova; Vojtech Sikl |
| Abstract: | Energy planners have long assumed that electricity demand will grow more price-responsive as metering, automation, and storage spread, an assumption now embedded in decarbonization plans. We test it against the empirical record: 4, 720 own-price elasticity estimates from 462 studies, with data spanning 1934-2024, ranked on a single ladder of identification quality from naive regressions to randomized experiments. Three findings emerge. First, the best-identified studies find smaller responses than naive ones: the publication-bias-corrected short-run elasticity is about -0.16 (a 10% rise in the electricity price cuts consumption by under 2%), and only -0.09 among the best-identified studies, whose adjusted value is statistically indistinguishable from zero. Second, responsiveness grows with time to adjust, roughly doubling from -0.16 in the short run to -0.38 in the long run as the capital stock turns over, but this pattern has itself been stable for decades. Third, and most important, responsiveness shows no upward trend across nine decades of data; if anything, the most technology-rich settings, including time-of-use pricing, are the least price-responsive in total consumption. Prices alone have not made total electricity consumption more responsive; broader demand flexibility will have to be engineered and paid for, through enabling technology, contracts, and program design. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.21285 |
| By: | Chitrakshi Jain (TrustBridge Rule of Law Foundation); Akshay Jaitly (TrustBridge Rule of Law Foundation) |
| Abstract: | This paper empirically studies how India's Central Electricity Regulatory Commission adjudicates force majeure disputes in electricity contracts. We examine 52 orders covering 77 party-level observations between 2018-2023. We find that solar generators bring the most claims, and that parties typically litigate during the pre-commissioning phase seeking extensions of time. We find that foreseeable risks like bureaucratic delay and grid or transmission constraints are frequently cited as the events for which such extensions are sought. The Commission rejected 56 of the 77 claims from our dataset. A significant share of rejections emanate from connectivity and transmission agreements, indicating a gap in how interdependent contracts are designed in the sector. Our findings indicate that force majeure litigation in the electricity sector is a result of insufficient appraisal of risks. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:bjd:wpaper:22 |
| By: | Adamson, S.; Pollitt, M. G. |
| Abstract: | A major claim for the benefits of locational marginal pricing (LMP) in electricity markets has related to increased efficiency in locational investment decisions. However, there has to date been little empirical evidence for this claim. Using a very large dataset of more than 1000 new plant investments in PJM over more than 20 years, we test whether LMPs have shaped investment decisions using quartiles and logistical regression techniques. We show that LMPs and locational capacity prices have been statistic ally significant in relation to where investments in solar and gas-fired generation across PJM, but not for wind generation. We also show that on an intrazonal basis LMP differences appear significant with respect to locational investment decisions for new solar generation within the Dominion zone of PJM. Finally, we note that while LMPs over longer periods of time are difficult to predict as they reflect natural gas prices and other economic variables, LMP basis differentials to a small number of traded hubs are much more predictable, consistent with new generators being able to hedge most price risks at a small number of traded hub prices. |
| Keywords: | Locational Marginal Pricing (LMP), Investment, PJM, Trading Hubs, Logistical Regression |
| JEL: | L94 Q42 Q48 |
| Date: | 2026–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2663 |
| By: | Peitz, Martin; Sato, Susumu |
| Abstract: | We propose a tractable model of asymmetric platform oligopoly with logit demand in which users from two distinct groups are subject to within-group and cross-group network effects and decide which platform to join. We characterize the equilibrium when platforms manage user access by setting participation fees for each user group. We explore the effects of platform entry, a change of incumbent platforms’ quality under free entry, and the degree of compatibility. We show how the analysis can be extended to partial user participation. |
| Keywords: | Oligopoly theory; Aggregative games; Network effects; Two-sided markets; Two-sided single-homing; Entry |
| JEL: | L13 L41 D43 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19584 |
| By: | Chiara Fumagalli (Bocconi University [Milan, Italy]); Bruno Jullien (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); Yassine Lefouili (TSE-R - TSE-R Toulouse School of Economics – Recherche - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Michele Polo (Bocconi University [Milan, Italy]) |
| Abstract: | This paper examines merger control in digital markets and the enforcement challenges it raises. We discuss recent developments in the U.S. and the EU and analyze how specific characteristics of digital markets can either enhance or mitigate the exercise of market power. We study the effects of digital mergers on competition both in the market and for the market, and assess their implications for innovation. The paper concludes with policy recommendations aimed at improving enforcers' assessment of digital mergers. |
| Keywords: | Merger control, Market definition, Innovation, Ecosystems |
| Date: | 2026–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05686566 |
| By: | José Alves; João Estevão |
| Abstract: | Europe’s energy geopolitics is usually told as a story of changing suppliers – Russian gas yesterday, Chinese clean technology tomorrow. Electrification adds a second, more local geopolitics, defined by who sits at the centre of the grid, who runs into bottlenecks, and who can call on flexibility when stress hits. Using public data alone, we build a bidding-zone-month panel covering 41 European zones over 2019-2025 and test six pre-stated hypotheses about how this internal layer redistributes price volatility, negative-price exposure, net imports, and cross-border price gaps. Three findings survive our identification checks. More cross-zonal capacity lowers net imports in average months, confirmed quasi-experimentally around the NordLink and Viking Link HVDC commissionings. Higher renewable shares raise within-month price volatility once network position is held fixed – about 1.8 EUR/MWh per ten percentage points of renewable share – concentrated in the network-central half of the panel. And the 2022 gas crisis widened the gap between EU-27 and non-EU European zones: integration transmitted the shock into the most-connected jurisdictions instead of dampening it. The flexibility-moderation prediction fails. Energy sovereignty in an electrified Europe is best understood as advantageous positioning within regional infrastructure, not separation from it; integration is double-edged. |
| Keywords: | electricity interdependence, energy transition, strategic vulnerability, congestion, Europe, energy security |
| JEL: | C33 D85 F52 Q41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12836 |
| By: | Boeri, Tito; Crescioli, Tommaso; Garnero, Andrea; Luisetto, Lorenzo G. |
| Abstract: | Can collective bargaining mitigate monopsony power? This paper studies the extent to which collective agreements regulating employee noncompete clauses affect firm-level markdowns in French manufacturing. Using a staggered difference-in-differences design, we find that such regulation reduces markdowns by 1.3%–2.2% on average. The effects increase over time and are stronger among smaller, less productive, low-wage firms. Leveraging a French Court of Cassation ruling requiring financial compensation for enforceable noncompetes, we show complementarity between national regulations and sectoral bargaining. By strengthening compliance and adding limitations, collective bargaining emerges as an effective regulatory tool shaping firms' use of noncompete agreements. |
| Keywords: | collective bargaining;monopsony;noncomplete agreements;unions |
| JEL: | J42 J51 J53 J58 J31 |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140384 |
| By: | Maggi, Giovanni; Mrazova, Monika |
| Abstract: | We examine the potential role of international agreements on product standards through a stylized model where countries have different regulatory preferences and firms incur fixed costs of regulatory diversity. Overall, our analysis suggests that the common perception of regulatory agreements as playing a key role in promoting harmonization may have been over- stated. We show that regulatory harmony can arise even in the absence of an agreement, and that “spontaneous†harmonization may be inefficient, suggesting that the role of regulatory agreements could be to promote regulatory diversity rather than harmonization. Moreover, the role of regulatory cooperation depends in important ways on the pattern of trade: in the presence of intra-industry trade, the potential role of an agreement tends to be more limited, and under some conditions it can only play a coordination role. Finally, through the lens of our model, we examine the “Pop Critique†of regulatory agreements, according to which lobbying by corporate interests may lead to welfare-reducing harmonization. Our analysis lends only limited support to this critique. |
| Keywords: | International agreements; Harmonization; Regulation; Product standards; Lobbying |
| JEL: | F02 F13 F15 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19840 |
| By: | Poli, Lucas Luiz; Couleau, Anabelle; Pérez Urdiales, María; Tojal Ramos Dos Santos, Carolina |
| Abstract: | Ensuring safe drinking water depends not only on infrastructure but on effective regulatory compliance. This paper studies compliance with drinking water quality regulations through a three-layer framework that distinguishes among whether providers report monitoring data at all, whether those that do report collect the required number of samples, and whether the samples collected reveal violations of regulatory quality thresholds. Because each layer is a necessary condition for the next, failures in reporting and sampling can prevent official statistics from accurately reflecting underlying water quality risks. Using comprehensive administrative data from Brazil covering more than 5, 500 municipalities between 2010 and 2022, we show that failures at each compliance layer are widespread, non-random, and systematically correlated with municipal characteristics. Non-reporting and under-sampling are concentrated in poorer and lower-capacity municipalities, while over-sampling is prevalent among larger providers. Over-samplers report fewer violations than municipalities that comply exactly with the prescribed sample count, a pattern that admits several interpretations and that the administrative record alone cannot adjudicate. The reported violation share is therefore jointly determined with sampling behavior, and this joint determination is systematically related to the municipal characteristics that also predict contamination risk. Treating reported violations as the sole measure of regulatory performance yields a misleading picture of drinking water safety and obscures the importance of monitoring compliance with reporting and sampling requirements alongside quality thresholds. |
| JEL: | Q25 O54 Q53 I18 L51 D82 H75 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14693 |
| By: | Haucap, Justus; Delfs, Tobias; Fritz, Daniel; Thorwarth, Susanne |
| Abstract: | This paper provides an ex-post evaluation of Edeka's acquisition of Kaiser's Tengelmann, one of the most prominent merger cases in German grocery retailing. The transaction is particularly relevant from a competition-policy perspective because it was initially prohibited by the German Federal Cartel Office but was later implemented following ministerial authorisation. We analyse whether the acquisition led to higher consumer prices in local markets in which Edeka had previously faced competition from Kaiser's Tengelmann. The empirical analysis is based on weekly store-product-level price data from Edeka stores in the Rhine-Ruhr region covering the period from 2013 to 2020. We apply a difference-in-differences approach that compares price developments in Edeka stores exposed to Kaiser's Tengelmann before the acquisition with comparable Edeka stores without such local exposure. The results provide no evidence of a statistically significant merger-related increase in consumer prices. This finding is robust to additional specifications accounting for local demand, supply, and competitive conditions, as well as to alternative treatment definitions and sample restrictions. |
| Keywords: | Ex-post merger evaluation, Grocery retail mergers, Merger control, Local retail competition, Difference-in-differences, Consumer prices |
| JEL: | L41 L81 C23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dicedp:342558 |
| By: | Motta, Massimo; Polo, Michele |
| Abstract: | The paper analyzes the design of industrial policies, in the form of subsidies to innovation activity or to local production, when domestic firms are inefficient and there is a risk of supply-chain disruption. We first establish a case for research subsidies, since private investment (to improve the inferior technology) is lower than the socially optimal one. We next show the equivalence with subsidies to (inefficient) local production in case of intertemporal economies of scale. Then, within a general framework, we analyze profit and welfare maximizing investments and optimal subsidies in case of segmented markets and an integrated market organized as a duopoly, a monopoly or a research joint-venture. We show that research joint ventures or a public research center socially outperform the other environments since they benefit from a larger integrated market and a wider circulation of the innovation while preserving a competitive market. Finally, in large markets with significant technology gaps, it may be convenient to concentrate all the research in a single lab while maintaining a competitive market. |
| Keywords: | Resilience; Industrial policy; Mergers; Innovation |
| JEL: | L40 L52 O31 O32 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19699 |
| By: | De Loecker, Jan; Fuss, Catherine; Quiller-Doust, Nathan; Treuren, Leonard |
| Abstract: | We separately observe variable input expenditure and expenditure on fixed inputs in novel firm-level data covering the Belgian manufacturing sector over the last decades. This permits a deeper investigation of two potential drivers of the globally observed widening gap between firms’ revenue and variable input expenditure: technology and market power. Across the board, cost structures have become less reliant on variable input expenditure over time, while expenditure on fixed inputs or overhead costs has in- creased in prominence. We relate these changes in firms’ cost structures to performance measures and document that markups and gross profit rates increase substantially as the role of variable costs in production diminishes. Profit rates net of fixed input ex- penditure also increase, but by substantially less than gross profit rates. Our results suggest that technological change can explain a considerable portion of the widening gap between revenue and variable input expenditure, but that markups increase by more than necessary to break even, and that this phenomenon operates remarkably similarly across different firms and industries. |
| Keywords: | Markups; Technology |
| JEL: | D2 D4 L1 O4 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19641 |
| By: | Anna D’annunzio (UNINT - Università degli Studi Internazionali di Roma = University of International Studies of Rome); Yassine Lefouili (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); Bruno Jullien (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); Leonardo Madio (Unipd - Università degli Studi di Padova = University of Padua) |
| Abstract: | This paper examines how horizontal mergers affect firms' incentives to invest in R&D leading to the development of new products. We characterize the impact of a merger to monopoly and a 3-to-2 merger on equilibrium innovation efforts and consumer surplus, absent efficiency gains and spillovers. We show that a 3-to-2 merger directly alters the outsider's innovation incentives by shifting its best-response function upward, and we analyze how this mechanism affects merger outcomes for innovation and consumer surplus. Finally, we examine how efficiency gains and remedies modify post-merger innovation efforts. |
| Keywords: | R&D Investments, Amp, Product Innovation, Horizontal Mergers |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05680914 |
| By: | Emmanuel Dhyne; Amil Petrin; Frederic Warzynski |
| Abstract: | This paper studies how the removal of price regulation was associated with changes in quality, efficiency, and welfare in the Belgian bread and cake industry. In the summer of 2004, price controls on bread were abolished. Because most firms in this industry produce both bread and cakes, the reform provides a useful setting in which to examine both direct changes in the deregulated market and spillovers to a related product line. We use detailed firm-product-level information on values and physical quantities to estimate product quality, technical efficiency, marginal costs, markups, and welfare. We find that deregulation was associated with substantial improvements in both quality and efficiency. Welfare increased through gains in consumer surplus and producer surplus, and the gains were not confined to bread. We also find evidence of spillovers to cake production, suggesting that deregulation encouraged technological upgrading that affected firms' broader production process. |
| Keywords: | multi product firms, efficiency, cost estimation, markups, spillovers, welfare |
| JEL: | L11 L25 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12900 |
| By: | Mathias Dolls; Clemens Fuest; David Gstrein; Carla Krolage; Florian Neumeier |
| Abstract: | We study how regulatory risk affects housing markets in the aftermath of rent control. Our setting is Berlin, where a stringent rent cap introduced in 2020 was repealed in 2021, but was followed by continued political debate over expropriation of housing companies and further intervention. Using micro-level listing data and a hedonic difference-in-differences design comparing Berlin to other major German cities, we show that Berlin’s price-rent ratio remained 10–15 percent below its pre-intervention trend three years after repeal. To interpret this persistence, we develop a simple model in which institutional investors face greater exposure to future regulation. The model predicts lower asset prices, reduced institutional ownership, and partial crowding-in of private investors. Consistent with these predictions, we document a sharp rise in housing policy uncertainty after repeal and show that large housing companies reduced their Berlin portfolios, accepted lower sale prices, and sharply cut construction activity. The results imply that credible threats of future intervention can depress housing valuations and reshape market structure even in the absence of binding regulation. |
| Keywords: | housing markets, rent regulation, policy uncertainty, asset pricing, institutional investors, property rights |
| JEL: | R31 R38 D84 G12 P48 H13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12851 |
| By: | Luis E. Gonzales (Central Bank of Chile); Koichiro Ito (University of Chicago and NBER); Mar Reguant (IAE-CSIC, Northwestern, CEPR, and NBER) |
| Abstract: | Electricity reliability is a central challenge for the energy transition, as growing energy demand, renewable energy integration, and natural disasters increase the risk of large-scale blackouts. However, the economic impacts of large-scale blackouts remain largely unknown. Combining electricity market data with high-frequency economic transaction data from Chile, we find that economic activity declined by 35 percent on the nationwide blackout day, but half of this loss was recovered on subsequent days, highlighting the importance of intertemporal substitution. Exploiting spatial variation in blackout severity, we show that accounting for endogenous recovery is critical when estimating the marginal value of lost load. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-53 |
| By: | Peitz, Martin; Sobolev, Anton |
| Abstract: | A seller can offer an experience good directly to consumers and indirectly through an intermediary. When selling indirectly, the intermediary provides recommendations based on the consumer’s match value and the prices at which the product is sold. The intermediary faces the trade-off between extracting rents from consumers who strongly care about the match value versus providing less informative recommendations but also serving consumers who do not. We analyze the allocative and welfare effects of prohibiting price parity clauses and/or regulating the intermediary’s recommender system. Prohibiting price parity clauses is always welfare decreasing in our model. |
| Keywords: | E-commerce |
| JEL: | L12 L15 D21 D42 M37 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19659 |
| By: | Antler, Yair; Spiegler, Ran |
| Abstract: | We develop a market model in which products generate state-dependent potential hidden charges. Firms differ in their ability to realize this potential. Unlike firms, consumers do not observe the state. They try to infer hidden charges from market prices, using idiosyncratic subjective models. We show that an interior competitive equilibrium is uniquely given by what is formally a Bellman equation. Using this representation, we show that relative to rational expectations, add-on charges are lower whereas headline prices and social welfare are higher. Market responses to shocks display patterns that are impossible under rational expectations. For example, although fully revealing, equilibrium prices can vary with consumers' private information. |
| Keywords: | Competitive equilibrium; Boundedly rational expectations; Add-ons; Hidden fees |
| JEL: | D41 D84 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19562 |
| By: | Pitters, Julia; Seitz, Franz |
| Abstract: | The decline of cash used for transaction purposes as well as the increase in total currency in circulation is usually discussed with respect to cost, efficiency and technological progress, i.e. digitalization. A large literature estimates the costs of cash production, distribution and handling. By contrast, the societal value of cash remains far less investigated and rarely quantified. This asymmetry matters because policy debates that monetize costs but leave benefits unconsidered may undervalue a payment instrument. The paper establishes a composite indicator capturing cash's value to society across five key dimensions: resilience, privacy, inclusion, cost control, and competition-supplemented by consumer surplus from seigniorage. We apply the methodology to Germany but the framework is designed to be replicable across countries and to support more balanced government and central-bank policy analysis. It combines a representative consumer survey, expert interviews, macro data and interdisciplinary workshops. In the base calibration, the aggregate value equals around 1.2 % of GDP. These results suggest that policy evaluations should incorporate cash's multifaceted benefits alongside costs. Recognizing cash's broader societal role can guide central banks and policymakers in fostering balanced payment ecosystems that preserve both innovation and public redundancy. |
| Keywords: | cash value, public money, payment system, inclusion, privacy, resilience |
| JEL: | D12 E41 E42 E58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:imfswp:342551 |
| By: | SECK, Serigne Momar |
| Abstract: | This study examines the impact of infrastructure on real convergence among ECOWAS member states over the period 2000-2024. It assesses the extent to which improvements in infrastructure contribute to narrowing economic performance gaps between member countries and the region’s most advanced economies. To capture the multidimensional nature of infrastructure, a composite infrastructure index is constructed using Principal Component Analysis (PCA), based on four dimensions: transport infrastructure, access to electricity, internet usage, and mobile telephony. The analysis relies on a panel dataset covering the fifteen ECOWAS countries and incorporates several control variables, including intra-regional trade openness, inflation, agricultural value added, macroeconomic stability, human capital, and governance. The empirical strategy combines fixed-effects and random-effects models, Panel-Corrected Standard Errors (PCSE), Driscoll-Kraay standard errors, the dynamic System-GMM estimator, and an instrumental variable approach that uses public investment as an instrument for the infrastructure index. The study’s originality lies in the use of Cape Verde as the regional development frontier, complemented by robustness checks employing Ghana, Côte d’Ivoire, Nigeria, and the ECOWAS regional average as alternative benchmarks. The results indicate that infrastructure significantly contributes to reducing growth disparities within ECOWAS. Transport infrastructure emerges as the main driver of convergence, followed by access to electricity and mobile telephony. Sensitivity analyses confirm the robustness of the findings, particularly when Cape Verde is used as the regional benchmark. Overall, the study highlights the central role of infrastructure in fostering economic catch-up and strengthening regional integration in West Africa. |
| Keywords: | Real convergence; Infrastructure; ECOWAS; Economic growth; Regional integration; Panel data; Principal Component Analysis (PCA); Instrumental variables. |
| JEL: | F43 F45 L92 L93 L95 L96 O11 O12 R42 |
| Date: | 2026–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:130385 |
| By: | Papatheophilou, Simela; Tröster, Bernhard; Blöschl, Robert; Weber, Christina; Schafhausen, Carola; Herzig, Christian |
| Abstract: | Power imbalances in EU agri-food value chains have prompted legislators to prohibit 'Unfair Trading Practices' (UTPs). The European UTP framework extends to global value chains (GVCs) such as cocoa and banana chains, where the EU is a major consumer and which are known for the application of UTPs. However, European UTP legislations have proven ineffective in addressing UTPs globally. Through comparative legal analysis, review of academic literature and Member States' UTP reports, and semi-structured interviews, we investigate factors contributing to the minimal uptake of UTP regulations in GVCs. Our findings identify key barriers: diverging regulatory and enforcement approaches across EU Member States, limited awareness and the fear factor among GVC actors, and the absence of pricerelated provisions. Targeted reforms to harmonize selected provisions and enforcement approaches provide options to strengthen the regulatory framework's capacity to mitigate power imbalances in agri-food GVCs. |
| Keywords: | Unfair Trading Practices, global value chains, cocoa, bananas, enforcement mechanisms |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:oefser:342442 |