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The European Union (EU) Digital Markets Act (DMA) aims to increase competition and fairness in the EU digital markets by reducing entry barriers and ensuring a better distribution of value generated by digital platforms. The DMA is enforced by the European Commission, which has become a fully-fledged 'federal' regulator for the first time. The DMA is part of a broader EU regulatory framework for digital platforms, and it aims to achieve principles of a Declaration on Digital Rights and Principles, including increasing user choice and promoting fair competition and innovation. The DMA imposes obligations on the biggest digital platforms, known as gatekeepers, to increase transparency, prohibit anti-competitive practices, reduce entry barriers, and open up platforms and data. The DMA does not break up the biggest platforms but aims to create competition while preserving network and ecosystem effects. The implementation of the DMA will lead to changes in technical architecture, market dynamics, and social norms, and it presents an opportunity to regain some of the early promises of the internet. [Extracted from the article]

The ISO 14001 voluntary standard is a blueprint for improving an organization’s environmental record and one of many tools available to address our planet’s ecological challenges. Since its introduction in 1996, adoption of the standard has surged globally, despite its significant costs. We examine the economic benefits to firms of being ISO 14001-certified by exploring whether certification results in a more efficient production process, using a panel of South Korean manufacturing firms and a stochastic frontier model with endogeneity. We find evidence that ISO 14001 certification significantly improves technical efficiency among high-polluting industries, increasing output by an average of 2.7%. This research enriches the empirical literature on voluntary environmental programs by showing that the standard improves technical efficiency among manufacturing firms. This may account for the popularity of the standard in South Korea, a global leader in manufacturing and exports, where its effects on efficiency have not been empirically examined. [ABSTRACT FROM AUTHOR]

This study examines how regulatory policy impacts the complex relationship between bank risk-taking and the predicted probability of a systemic banking crisis in 54 African countries for the period, 2004–2020. The empirical evidence is based on the instrumental variable probit panel regressions. The study found a non-linear U-shaped relationship between bank risk-taking and the probability of a systemic banking crisis. The study shows that a systemic banking crisis is likely to occur when the monotonically increasing levels of risk-taking of banks exceed thresholds of 0.015 and 0.79. The study also found that the thresholds of risk-taking in countries with stringent regulatory policies are relatively greater in countries operating in low regulatory policy regimes. In light of the conditional marginal effects, the study provides evidence to support that regulatory policy amplifies and augments the negative linear impact of risk-taking on the predicted probability of a systemic banking crisis. This is relevant to policymakers because the established conditional effects imply that regulatory policy is a sufficient complementary condition for shaping the negative effect of bank risk-taking and systemic banking crises. [ABSTRACT FROM AUTHOR]

The Digital Markets Act (DMA) aims at promoting contestable and fair markets for core platform services by setting out obligations for designated gatekeepers. As the DMA does not clearly define these objectives, it comes into conflict with national legislation with overlapping objectives. This may include unfair competition laws and sector-specific regulation. Article 1(5) DMA addresses this conflict by stipulating that Member States may not impose further obligations on gatekeepers for the purpose of ensuring contestable and fair markets. The effect this has is that national provisions vis-à-vis gatekeepers may not be applicable anymore, and competences are centralized on the European level more broadly than potentially envisaged by the European legislature. This centralization of competences runs the risk of inadvertently privileging gatekeepers by blocking national laws that are, however, still applicable to small and medium-sized enterprises (SMEs) and other firms competing with gatekeepers. This article suggests solutions to mitigate such a risk. [ABSTRACT FROM AUTHOR]

Our main contribution is to identify the risks implied by the existence of prolonged regulatory lags. We hypothesize that a likely first response is to reduce OPEX, increasing efficiency. If the lag persists for enough time, a vicious circle of inefficiency, disinvestment, and reduced performance can follow. We use a regulatory episode affecting natural gas distributors in Argentina as a natural experiment, controlling with other Latin American countries' utilities not exposed to the same regulatory stimuli. We evaluate the relative efficiency of fourteen firms for five countries, in seven years, using Stochastic Frontiers Analysis (SFA). Thus, we perform a regulatory impact analysis (RIA) to assess the consequences on the performance of two idiosyncratic regulatory policy instruments applied in the distribution gas industry in Argentina in the 1998–2021 period (the 2002 Public Emergency Law and the 2016 Integral Tariff Review). [ABSTRACT FROM AUTHOR]

Objectives aimed at increasing higher education productivity, for instance, measured by credits per student, have stimulated the use of performance-based funding (PBF) by higher education institutions (HEIs). On theoretical grounds, PBF is expected to speed-up study program capacity adjustments through (re)allocations of study places. We conclude from analyses of Norwegian data that study places are adjusted efficiently if there are binding capacity restrictions at the institution level, or competition for students. Strengthened PBF does not affect long-run adjustments. Instead, admissions seem to adjust to secure full enrollment. The results provide an explanation of why very few positive effects of PBF in higher education are found in the literature. Given continued use of PBF to enhance productivity, a likely policy implication is to impose tighter restrictions on the total number of study places allocated to HEIs, or to change the price structure of the PBF model. [ABSTRACT FROM AUTHOR]

"Big data" gives markets access to previously unmeasured characteristics of individual agents. Policymakers must decide whether and how to regulate the use of this data. We study how new data affects incentives for agents to exert effort in settings such as the labor market, where an agent's quality is initially unknown but is forecast from an observable outcome. We show that measurement of a new covariate has a systematic effect on the average effort exerted by agents, with the direction of the effect determined by whether the covariate is informative about long‐run quality versus a shock to short‐run outcomes. For a class of covariates satisfying a statistical property that we call strong homoskedasticity, this effect is uniform across agents. More generally, new measurements can impact agents unequally, and we show that these distributional effects have a first‐order impact on social welfare. [ABSTRACT FROM AUTHOR]

Firm-level bribery and regulation are two of the many determinants of firm performance. However, most of the existing studies examine the direct and linear effects of bribery and regulation and overlook their indirect effects. Using firm-level data, covering 20,343 firms in 78 developing countries, and employing a threshold model, the effects of firm performance's standard determinants vary based on the bribery and regulation levels. Our findings reveal that the impact of bribery and regulation on firm performance varies significantly depending on corruption and regulation levels. Access to external finance improves firm performance if and only if the firms are exposed to bribes and firm-level regulation is below a given threshold. Furthermore, exports boost the performance of the firms that are exposed to more bribery and spend more time with regulation than those that face lower levels of regulation and bribery. While bribery harms firm performance, our findings reveal that spending time with regulation could improve firm performance if firms are exposed to low levels of bribery. Our findings confirm the 'sand the wheels' hypothesis and limiting firm-level bribery improves firm performance. [ABSTRACT FROM AUTHOR]

This special issue brings together the papers presented and discussed at the Harold A. Black Academic Conference hosted by the Probasco Distinguished Chair of Free Enterprise at the University of Tennessee, Chattanooga, the Haslam College of Business at the University of Tennessee, Knoxville, and the Political Economy Research Institute at Middle Tennessee State University. Dr. Black is an emeritus professor of finance at the Haslam College of Business at the University of Tennessee, Knoxville, and has had a distinguished career advancing our understanding of race and discrimination in banking and finance. More specifically, throughout his career, Dr. Black undertook in-depth empirical studies that examined the institutional details of statistically observed disparate outcomes in banking and finance to determine whether these outcomes were attributable to discrimination or could be explained by non-discriminatory factors. In some instances, Dr. Black found that addressing disparate outcomes with inappropriate policies could result in perverse consequences that harmed the intended beneficiaries. This introduction explores the relationship between Harold Black's work, the papers in this special issue examining, building on, and extending Harold Black's work, and public choice economics. [ABSTRACT FROM AUTHOR]

This article discusses how the European Commission can achieve the goal of effectively implementing the Digital Markets Act. Based on legal and economic reasoning, we highlight the important role of the gatekeeper's compliance report, and discuss how to incentivize gatekeepers to write useful reports. In addition, we develop recommendations regarding the internal organization of the Commission, the prioritization of cases, and how to effectively use the concurrent enforcement powers of the Digital Markets Act and Article 102 of the TFEU. We illustrate the principles we develop using four different EU antitrust cases. Furthermore, we discuss coordination between the Commission and National Competition Authorities and the need to already develop an independent evaluation process for the Digital Markets Act. [ABSTRACT FROM AUTHOR]

China's Paris Agreement Pledge and recent introduction of an Emissions Trading Scheme have created a need for information on where it makes the most economic sense to use different sources of energy. With lower carbon dioxide emissions, natural gas and liquefied petroleum gas provide cleaner sources of energy relative to coal. Although it is practically crucial to investigate the use of these two sources, empirical studies are limited due to lack of data. To fill the research gap, this paper studies the efficiency of natural gas and liquefied petroleum gas sector in China by using data from 24 major province-level divisions over the years 2006–2015. Efficiency is defined as the utility's ability to produce the highest output given fixed inputs. We find that: (1) GDP per capita and high customer density are associated with higher levels of efficiency and (2) utilities that serve higher proportions of households (as opposed to industry and firms) are associated with lower levels of efficiency. Policy makers can use this information to address China's energy needs due to rapid urbanization while also pursuing Paris Agreement goals. [ABSTRACT FROM AUTHOR]

The effects of a new firm's entry into the telecom service market are examined further. These consist of up- and downstream markets, corresponding to the first and second stages in game theory. When a new entrant can succeed in process innovation and lower production cost, entry of the entrant transforms the market structure into a Joint-Profit-Maximization monopoly under the European Commission (EC) constraint. However, the post-entry market becomes more competitive if the EC did not intervene the market. We observed that violation of the test does not necessarily mean the incumbent practices a margin squeeze. The EC does not prove that margin squeeze is a necessary and sufficient condition for the exit. Furthermore, Joint-Profit-Maximization monopoly can serve to explain why Japanese Telecoms fees are high.

Before 1941, U.S. regulatory bodies were unrestricted. By 1946, several states and the federal government had imposed restrictions. It further took 40 years for every state to enact an Administrative Procedures Act (APA), a law that dictates how regulatory agencies promulgate regulations. Despite being overlooked, APAs significantly impact states in often missed or ignored ways. We analyzed each state's rulemaking procedures at four different points in time to see if they've increased or decreased restrictions on regulatory agencies. We created two indexes: a Restrictiveness index, a summative index, and another derived from multiple correspondence analysis. We studied how legislative professionalism, interest group constraint, citizen ideology, and government partisanism affect APA restrictions.

We study default effects in the context of a residential electricity-pricing program. In the large-scale randomized controlled trial we analyse, one treatment group was given the option to opt-in to time-varying pricing while another was defaulted into the program but allowed to opt-out. We provide dramatic evidence of a default effect on program participation, consistent with previous research. A novel feature of our study is that we also observe how the default manipulation impacts customers' subsequent electricity consumption. Passive consumers who did not opt-out but would not have opted in-comprising more than 70% of the sample-nonetheless reduce consumption in response to higher prices. Observing of this follow-on behaviour enables us to assess competing explanations for the default effect. We draw conclusions about the likely welfare effects of defaulting customers onto time-varying pricing.

In this article, we reconceptualize, using an extended discrete and dynamic Ostrom's classification, the specific intellectual property (IP) regimes that support geographical indications (GIs) as 'knowledge commons', e.g. a set of shared collective knowledge resources constituting a complex ecosystem created and shared by a group of people that has remained subject to social dilemma. Geographical names are usually considered part of the public domain. However, under certain circumstances, geographical names have also been appropriated through trademark registration. Our analysis suggests that IP laws that support GIs first emerged in Europe and spread worldwide as a response to the threat of undue usurpation or private confiscation through trademark registration. We thus emphasize the nature of the tradeoffs faced when shifting GIs from the public domain to shared common property regimes, as defined by the EU legislation pertaining to GIs. In the context of trade globalization, we also compare the pros and cons of regulating GIs ex-ante rather than engaging in ex-post trademark litigation in the courts. [ABSTRACT FROM AUTHOR]

AbstractThis study investigates the relationship between prudential regulation and banking risk in the West African Economic and Monetary Union contingent on institutional quality. The empirical analysis employed panel data from 63 banks spanning 2006–2019. The key findings reveal that stringent banking regulations and supervision enhance banks’ stability. Capital regulations, activity restrictions, and supervisory authorities reduce the risk of bank insolvency. The results suggest that a favorable institutional climate promotes rigorous enforcement of regulatory standards and robust supervision, thereby amplifying their efficacy. Overall, this study concludes that prudential policies exhibit risk-mitigating effects in West African Economic and Monetary Union countries conditional on sound institutional frameworks.

19 Federal Trade Commission, 'Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act' (10 November 2022) Commission File No P221202 1, 9-10 < https://www.ftc.gov/system/files/ftc%5fgov/pdf/P221202Section5PolicyStatement.pdf > accessed 17 April 2023. 23 Lina Khan, 'Oversight of the Enforcement of the Antitrust Laws - Prepared Statement of the Federal Trade Commission Before the United States Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights' (20 September 2022) US Federal Trade Commission < https://www.ftc.gov/system/files/ftc%5fgov/pdf/P210100SenateAntitrustTestimony09202022.pdf > accessed 17 April 2023. Keywords: Antitrust; Consumer Welfare Standard; Chicago School; Neo-Brandeis; Department of Justice; Federal Trade Commission; K21; L40; L41; L51 EN Antitrust Consumer Welfare Standard Chicago School Neo-Brandeis Department of Justice Federal Trade Commission K21 L40 L41 L51 203 208 6 08/11/23 20230701 NES 230701 I. INTRODUCTION The Biden Administration is seeking to redefine US antitrust policy that it views as largely responsible for historical underenforcement of antitrust laws in the USA.[1] To achieve this, President Biden appointed progressive reformers to leadership positions[2] and lawmakers are proposing amendments to the antitrust laws.[3] These reforms could be described as a battle for the very soul of antitrust though such policy shifts in antitrust enforcement are not unprecedented.[4] Arguably a victor of a previous antitrust policy battle was the Chicago School with its core underlying assumption that markets self-correct.[5] Allied to that view was its emphasis on economic theory and analytical methods that rely heavily on economic analysis, especially the consumer welfare standard (CWS). [Extracted from the article]