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on Regulation |
| By: | Doyle, Chris |
| Abstract: | Low Earth orbit (LEO) satellite systems are becoming an increasingly important component of global communications infrastructure, providing broadband access, enterprise connectivity, and direct-to-device services in competition with terrestrial networks. At the same time, orbital space is a congestible shared resource: satellite deployments increase conjunction risk and debris, imposing external costs on other operators. This paper analyses how these features interact by modelling LEO satellite broadband as a capacity-constrained oligopoly operating under an orbital congestion externality. We develop a two-stage model in which satellite operators first choose constellation size and research and development (R&D) investment, and subsequently compete in quantities subject to binding capacity constraints. Orbital congestion damages depend on aggregate satellite deployment, while operators are privately exposed to only a fraction of the resulting congestion risk. Three results emerge. First, oligopolistic competition and incomplete congestion internalisation generate distinct distortions: output and innovation are inefficiently low due to market power, while satellite deployment is excessive when firms do not face the full marginal social cost of congestion. Second, R&D interacts non-trivially with congestion risk through its effect on throughput per satellite, creating substitution between “more satellites” and “smarter satellites.” Third, regulatory instruments such as Pigouvian satellite charges or tradable conjunction-risk permits can correct deployment incentives but do not eliminate distortions arising from imperfect competition. These results highlight that congestion pricing and competition policy operate as complementary instruments in the governance of emerging satellite broadband markets, with implications for spectrum policy, launch regulation, and the management of shared orbital resources. |
| Keywords: | satellite broadband; orbital congestion; congestion externalities; oligopoly; innovation (R&D); tradable permits |
| JEL: | L13 |
| Date: | 2026–03–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137755 |
| By: | Lucas Eustache (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres); Eric Brousseau (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres); Joëlle Toledano (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres) |
| Abstract: | Data-sharing ecosystems (DSEs) emerge as key organizational arrangements for digital innovation, yet their economic and governance foundations remain poorly understood. Drawing on qualitative evidence from major European DSEs, this study identifies six conditions that shape viability, ranging from investment needs and innovation logic to integration complexity, security management, competitive dynamics, and interest alignment. The findings show that these conditions evolve across the development of DSEs, and that sustainability depends both on the ability to establish tailored use cases and on how orchestrators adapt governance to the ecosystem structure. The study contributes to ecosystem and platform theory by reframing DSEs as generative, innovation-driven structures, conceptualizing economic viability as phasecontingent, and integrating strategic and technical governance roles into a unified, contextdependent model. These insights advance theoretical understanding of ecosystem economics and provide guidance for the design of data ecosystems capable of achieving long-term sustainability. |
| Keywords: | Interorganizational data sharing, Data-sharing ecosystems, Platform governance, Digital ecosystems, Ecosystem sustainability, Interorganizational data sharing Data-sharing ecosystems Platform governance Digital ecosystems Ecosystem sustainability |
| Date: | 2025–12–14 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05542222 |
| By: | Germà Bel (IREA-UB & Universitat de Barcelona, Spain.); Joël Bühler (IREA-UB & Universitat de Barcelona, Spain.) |
| Abstract: | Governments around the globe are considering taking back direct control as an option to reform privatized public services, particularly on the local level. Using a difference-in-differences framework, we find that remunicipalization of urban water leads to price reductions of about 3-6 cents per cubic meter in larger municipalities, but the effect does not extend to smaller municipalities. Given our finding of unchanged water usage, these reductions in large municipalities translate directly to consumers’ bills. As remunicipalization typically happens when a contract with a private firm expires, we investigate whether the threat of competition or remunicipalization arising from expiring contracts itself also leads to price reductions. After contract expiry without remunicipalization, water prices decline by 2-3 cents per cubic meter. Thus, while remunicipalization reduces prices particularly in larger municipalities, threats at contract expiry have a smaller, but more uniform price effect. |
| Keywords: | Remunicipalization; Urban Water; Prices; Privatization; Public Services. JEL classification: H13; H41; H70; L95. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202603 |
| By: | Elsa Bou Gebrael (American University of Beirut, Maroun Semaan Faculty of Engineering and Architecture, Industrial Engineering and Management Department Beirut, Lebanon); Majd Olleik (American University of Beirut, Maroun Semaan Faculty of Engineering and Architecture, Industrial Engineering and Management Department Beirut, Lebanon); Sebastian Zwickl-Bernhard (Vienna University of Technology, Institute of Energy Systems and Electrical Drives, Energy Economics Group) |
| Abstract: | In many low-income countries, neighborhood diesel generators are widely used to compensate for unreliable or unavailable national electricity grids. These diesel-based microgrids are typically characterized by market power, significant pollution, and weak regulatory oversight. In parallel, households increasingly deploy off-grid solar photovoltaic (PV) systems to gain control over electricity supply. However, these systems suffer from curtailed excess generation during peak solar hours and unreliable access at other times. While prior studies have optimized microgrids in developing contexts from a techno-economic perspective, they largely neglect the market power exerted by monopolistic private generators. This paper addresses this gap by developing a bi-level game-theoretic model that enables household-generated electricity to be fed into the microgrid while explicitly accounting for the market power of a neighborhood diesel generator company (DGC). The regulator sets price and feed-in-tariff caps to maximize household economic surplus (HES), while the DGC acts as a profit-maximizing agent controlling access and supply. The model is applied to a Lebanese case study using high-resolution empirical data collected via logging devices. Results show that: (i) price and feed-in-tariff caps substantially increase HES and consistently induce significant household PV feed-in to the microgrid; (ii) higher DGC budgets or greater PV-owner penetration lead to pronounced gains in HES; and (iii) the renewable energy share reaches 60% under base conditions and approaches 100% at sufficiently high budgets or PV-owner penetration levels, compared to 0% under the status quo. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.16893 |
| By: | Martin Peitz |
| Abstract: | Innovation and the diffusion of new technologies are central to consumer welfare in dynamic markets. On the one hand, mergers may harm innovation by removing independent innovation paths, restricting access to key inputs for innovation, or weakening incentives to adopt and diffuse new technologies. On the other hand, mergers may generate innovation efficiencies when they combine complementary tangible and intangible assets. This article discusses how the revised EU Merger Guidelines should evaluate these opposing forces and proposes a structured approach to assessing innovation harms and efficiencies while ensuring that merger control remains focused on effective competition and consumer welfare. |
| Keywords: | EU merger control, innovation theories of harm, innovation efficiencies, start-up acquisitions, EU Merger Guidelines |
| JEL: | K21 L40 L41 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_741 |
| By: | Nicolas Eschenbaum; Nicolas Greber |
| Abstract: | This paper studies how platform design shapes strategic behavior in decentralized electricity trading. We develop a finite-horizon dynamic game in which photovoltaic- and battery-equipped players ("prosumers") trade on a platform that maps aggregate imports and exports into internal buy and sell prices. We establish existence of a perfect conditional epsilon-equilibrium and characterize a Cournot-like market-power mechanism in an observable-types benchmark of the game: because the producer price is decreasing in aggregate exports, strategic prosumers withhold supply and underutilize storage relative to the price-taking benchmark. To quantify these effects, we use a multi-agent computational framework that exploits the differentiable structure of the platform's clearing rule to compare planner, price-taking, and strategic outcomes under alternative pricing mechanisms. In our baseline calibration, strategic play raises grid settlement cost by about 6 percent relative to price-taking. The magnitude of the distortion depends strongly on platform design: some designs can largely eliminate strategic incentives, while increased competition in storage ownership sharply reduces withholding, with most of the distortion disappearing once storage is split across more than three owners. We also find that information disclosure can improve competitive coordination but also increase the market power effects. Despite these distortions, the platform remains highly valuable overall, reducing a passive consumer's annual electricity bill by roughly 40 percent relative to exclusive grid settlement, with strategic behavior clawing back only about 8 percent of that saving. The results show that pricing rules, information disclosure, and ownership structure determine how much of the gains from decentralized electricity trading are realized. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.19988 |
| By: | Andrew Rhodes (Toulouse School of Economics); Jidong Zhou (Yale University); Junjie Zhou (Tsinghua University) |
| Abstract: | This paper develops a framework in which a multiproduct ecosystem competes with multiple single-product firms in both price and innovation. The ecosystem can use data from one product to improve the quality of its other products. We use the framework to study three regulatory policies aimed at leveling the playing field. Restricting the ecosystem's cross-product data usage, or forcing it to share data with single-product firms, benefits those firms and induces them to innovate more. However, these policies also dampen the ecosystem's incentive to collect data and innovate, potentially raising prices. Consumers are better off only when single-product firms are sufficiently good at innovating. Facilitating data exchange between single-product firms via a data cooperative can backfire and harm them, because it induces the ecosystem to price more aggressively. For both the data-sharing and data-cooperative policies, there exist data-compensation schemes such that consumers are better off compared to no regulation. |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2426r1 |
| By: | Sihan Qian; Amit Mehra; Dengpan Liu |
| Abstract: | The rise of foundation models has driven the emergence of AI supply chains, where upstream foundation model providers offer fine-tuning and inference services to downstream firms developing domain-specific applications. Downstream firms pay providers to use their computing infrastructure to fine-tune models with proprietary data, creating a co-creation dynamic that enhances model quality. Amid concerns that foundation model providers and downstream firms may capture excessive consumer surplus, along with increasing regulatory measures, this study employs a game-theoretic model involving a provider and two competing downstream firms to analyze how policy interventions affect consumer surplus in the AI supply chain. Our analysis shows that policies promoting price competition in downstream markets (i.e., pro-price-competitive policies) boost consumer surplus only when compute or data preprocessing costs are high, while compute subsidies are effective only when these costs are low, suggesting these policies complement each other. In contrast, policies promoting quality competition in downstream markets (i.e., pro-quality-competitive policies) always improve consumer surplus. We also find that under pro-price-competitive policies or compute subsidies, both the provider and downstream firms can achieve higher profits along with greater consumer surplus, creating a win-win-win outcome. However, pro-quality-competitive policies increase the provider's profits while reducing those of downstream firms. Finally, as compute costs decline, pro-price-competitive policies may lose their effectiveness, whereas compute subsidies may shift from ineffective to effective. These findings offer insights for policymakers seeking to foster AI supply chains that are economically efficient and socially beneficial. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.12630 |
| By: | Gökhan Dilek (Department of Applied Economics, Public Policies Section (OAP- GiM), Universitat de Barcelona, Spain.); Joël Bühler (Department of Applied Economics, Public Policies Section (OAP- GiM), Universitat de Barcelona, Spain.) |
| Abstract: | Local responses to renewable energy projects range from opposition that delays or blocks deployment to active support and participation. A common narrative underlying these behaviors emphasizes economic considerations: projects that impose local externalities without delivering local benefits tend to face resistance, whereas renewable energy communities (RECs) that are formed by citizens are argued to generate more local economic value than corporate plants. This paper examines these two related claims by comparing the local economic effects of community-owned and corporate-owned renewable energy plants. Using heterogeneity-robust difference-indifferences estimators and panel data for UK local authority districts, we estimate the income and employment impacts of community and corporate solar and wind projects. We find evidence of local economic benefits for some ownership–technology combinations, with substantial heterogeneity across ownership structures and technologies. Overall, the results point to a nuanced relationship between renewable energy deployment, ownership models, and local economic outcomes. |
| Keywords: | The United Kingdom; Renewable Energy Communities; Energy Transition; Renewable Energy; Green Growth. JEL classification: C33; E24; J21; L94; O13; Q52; R23. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202604 |
| By: | Khem Raj Bhatt; Krishna Sharma |
| Abstract: | We study the deployment performance of machine learning based enforcement systems used in cryptocurrency anti money laundering (AML). Using forward looking and rolling evaluations on Bitcoin transaction data, we show that strong static classification metrics substantially overstate real world regulatory effectiveness. Temporal nonstationarity induces pronounced instability in cost sensitive enforcement thresholds, generating large and persistent excess regulatory losses relative to dynamically optimal benchmarks. The core failure arises from miscalibration of decision rules rather than from declining predictive accuracy per se. These findings underscore the fragility of fixed AML enforcement policies in evolving digital asset markets and motivate loss-based evaluation frameworks for regulatory oversight. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.04328 |
| By: | Born, Alexandra; Gati, Zakaria; Lambert, Claudia; Naeem, Mahvish; Pellicani, Antonella |
| Abstract: | Decentralised Finance (DeFi) emerged in 2021 as a fast-growing crypto segment, attracting policymakers’ attention due to its innovative approach of delivering financial services without relying on centralised intermediaries. This paper assesses DeFi governance arrangements for regulating and supervising DeFi using a comprehensive dataset. We find that governance token holders of four protocols (Aave, MakerDAO, Ampleforth, Uniswap) are highly concentrated with around half or more holdings linked to the protocols themselves or exchanges. Top voters are mostly delegates, who, in many cases, could not be identified nor linked to token holders. The study offers insights for policymakers regarding the implementation of policy measures aimed at bringing relevant entities under the regulatory umbrella. The difficulty in identifying holders and voters using public data may make it hard to rely on some of the regulatory anchor points often put forward in the policy debate such as governance token holders, developers or centralised exchanges. JEL Classification: G18, G23, G28, O33 |
| Keywords: | decentralised finance, financial stability risks, governance, regulation |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263208 |
| By: | Danilo Cascaldi-Garcia; Matteo Iacoviello |
| Abstract: | We construct a news-based index of deregulation for the United States from 1960 through 2025 using AI to semantically classify newspaper articles. We distinguish articles discussing deregulation from those discussing increased regulation, assigning intensity scores that reflect both the centrality of deregulatory content and whether articles discuss advocacy, proposals, or enacted measures. Human validation confirms strong agreement between AI and human classifications. The deregulation index captures major reform episodes including transportation and telecommunications liberalization in the 1970s--1980s, financial deregulation in the 1980s-1990s, and recent deregulatory activity. We decompose the index by sector, type of deregulation, and policy stage. We validate the news-based index against a parallel index constructed using Federal Register documents: the news-based index leads the Federal Register index by nearly one year, consistent with media coverage reflecting policy intentions before formal implementation. Unlike measures based on detailed statutory coding or Federal Register counts that weigh all rules equally, our approach covers the entire economy and weighs naturally by newsworthiness, capturing regulatory shifts before they materialize in law. Positive shocks to deregulation boost investment, productivity, stock prices, profits, and GDP. Industry-specific deregulation shocks boost industry-level stock returns, consistent with our finding that deregulation involves measures that may impact incumbent profitability and operational efficiency more than competitive entry. |
| Keywords: | Economic uncertainty; Productivity; Economic regulation |
| JEL: | D80 E66 L51 |
| Date: | 2026–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:102902 |
| By: | Witson Peña Tello (Observatory of Analysis and Evaluation of Public Policies and the Research Group on Governments and Markets, Universitat de Barcelona, Spain.) |
| Abstract: | This paper investigates how U.S. gubernatorial partisanship and electric utility interests jointly shape the adoption and stringency of three widely used electricity-sector climate policies: greenhouse gas cap-and-trade, emissions standards, and renewable portfolio standards. Using panel data for 48 states over 29 years, this study applies difference-indifferences and regression discontinuity designs that exploit within-state partisan alternation and quasi-random variation from close gubernatorial elections. The results indicate that Democratic governorships associate with higher probabilities of policy adoption and greater stringency than Republican ones. However, these partisan effects attenuate in states with fossil-intensive utility capacity and strengthen in renewable-rich states, particularly for discretionary and mandatory renewable portfolio standards. This work extends the empirical political economy literature by comparing instrument choice and stringency across three major electricity-sector climate policies and by evaluating how utility sector composition and reelection incentives moderate or amplify partisan influence. The findings highlight that electricity-sector decarbonization strategies need to account for both environmental externalities and the local political-economic conditions that shape feasible policy options. |
| Keywords: | Climate Policies; Political Parties; Electric Utility Interests. JEL classification: D72; L94; Q42; Q48; Q54. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202524 |
| By: | Momo Komatsu |
| Abstract: | During the energy crisis in 2022 some Euro Area countries introduced price caps on energy, while others did not, leading to about 30 percentage points higher energy inflation in uncapped countries. This paper investigates the trade-offs policymakers face with energy price caps in a two-country currency union model with shared energy supply. The cooperative, optimal outcome is for neither country to impose a price cap, since the cap is a costly market distortion. However, capping allows a country to avoid a crisis at the cost of negative spillovers on the uncapped country, characterized by high inflation and lower output. The quantitative model with non-homothetic preferences and substitutability of energy sources shows that the cost of the price cap exceeds the cost of such spillovers, explaining why some countries capped prices while others did not. Moreover, I show that the spillovers from price caps contributed to about 10 (0.5) percentage points of energy (headline) inflation in the uncapped Euro Area countries in 2022. Targeted transfers, an alternative policy to the price cap, is a cheaper and more effective way to boost consumption of the poor without creating divergence within the union. |
| Keywords: | energy crisis; energy price cap; inflation; international spillovers |
| JEL: | E31 E63 F45 Q41 |
| Date: | 2025–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:102901 |