Essays On Market Intervention And Regulation
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Essays On Market Intervention And Regulation
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Author : David Rietzke
language : en
Publisher:
Release Date : 2014
Essays On Market Intervention And Regulation written by David Rietzke and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This dissertation is a theoretical exploration of commonly used policy tools meant to improve market performance. The first chapter examines the use of prizes and grants as instruments for encouraging research and development. The second chapter investigates the welfare impact of price caps in oligopoly markets with endogenous entry. The third chapter studies the relationship between deposit insurance and bank risk taking, when a banker is motivated by reciprocity. The first chapter explores the use of grants and prizes as tools for encouraging research activity and innovation. Grants and prizes are commonly used by public and private research funders, and encourage R & D activity in different ways. Grants encourage innovation by subsidizing research inputs, while prizes reward research output. A common rationale for prizes is moral hazard; if a funder cannot observe all relevant research inputs then prizes create a strong incentive for R & D activity. In this chapter, it is shown that grants are a more efficient means of funding when a researcher's ability is unknown to the funder (adverse selection). When both adverse selection and moral hazard problems exist, a grant may emerge as an optimal funding mechanism, provided the moral hazard problem is relatively weak. In settings where the moral hazard problem is sufficiently strong, a grant emerges as part of an optimal funding mechanism, in conjunction with a prize. These results are useful for understanding different funding mechanisms used by both public and private entities. The second chapter, which is based on joint work with Stan Reynolds, examines the impact of price caps in oligopoly markets with endogenous entry. In the case of deterministic demand, reducing a price cap yields increased total output, consumer welfare, and total welfare. This result falls in line with classic results on price caps in monopoly markets, and with results for oligopoly markets with a fixed number of firms. These comparative static results for price caps need not hold when demand is stochastic and the number of firms is fixed, but recent results in the literature show that a welfare improving price cap does exist. We show that a welfare-improving cap need not exist in the case where demand is stochastic and entry is endogenous. In addition, we provide restrictions on the demand function such that a welfare-improving price cap exists under endogenous entry and stochastic demand. The third chapter, which is based on a joint project with Martin Dufwenberg, investigates the relationship between deposit insurance, risk taking, and insolvency. Empirical evidence suggests that the introduction of deposit insurance increases risk taking by banks and results in a greater chance of insolvency. The common rationale for this connection is that deposit insurance decreases the incentive for customers to monitor their banks, and invites excessive risk taking. In this chapter, it is argued that this classic explanation is somewhat puzzling. If customers can monitor their bank's behavior, certainly the insurance provider (FDIC) has this same ability. If this is the case, appropriate mechanisms could limit the moral hazard problem. We put forth an alternative explanation, and demonstrate that deposit insurance invites excessive risk taking when a banker is motivated by reciprocity.
Essays On The Effect Of Government Intervention On The Conduct And Performance Of Cigarette Firms
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Author : Shilpi Bihari
language : en
Publisher:
Release Date : 2007
Essays On The Effect Of Government Intervention On The Conduct And Performance Of Cigarette Firms written by Shilpi Bihari and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Cigarette industry categories.
This dissertation considers topics in the economics of advertising, highlighting the effect of government intervention on cigarette firms' conduct and performance. The first essay of this dissertation models the effects of government intervention on the goodwill and market power of a firm. The model takes into consideration the fact that consumption of cigarettes is a function of the government interventions as well as the goodwill of the rival firms. The results indicate that market power might be reduced because of government regulation if demand is more responsive to government interventions, but also that firms respond to regulation by increased advertising. In cases where demand is more responsive to government regulation, government should intervene continuously to deter the effects of the intensified advertising by the firms. In the second essay of this dissertation, we estimate market power among cigarette manufacturers over 1952-1984, a period of uniform pricing. We apply the Bresnahan (1982) approach; use industry level data at the firm level; employ a dynamic model with habit persistence; and add an advertising equation, which helps identify the parameters, increase degrees of freedom, and constrain parameters so we can interpret our results at the firm level. We consider effects of government interventions upon demand and market power and find, for instance, that the 1971 broadcast advertising ban decreased market power. In the third essay we use the same approach as in the previous essay using firm level data for a particular firm, Philip Morris. We explore the estimation of market power, advertising conjectures, and coefficients of rival's response to Philip Morris' advertising and price. Although the estimation results are not conclusive, we are able to suggest several sources of difficulty in such estimation, which could assist in further endeavors of this kind.
Money And The Market
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Author : Kevin Dowd
language : en
Publisher: Routledge
Release Date : 2013-12-16
Money And The Market written by Kevin Dowd and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-12-16 with Business & Economics categories.
Kevin Dowd asserts that state intervention into financial and monetary systems has failed, and that we would be better off if financial markets were left to regulate themselves. This collection will appeal to students, researchers and policy makers in the monetary and financial area.
Three Essays On Government Intervention In The Oil And Gas Industry
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Author : Anastasia Christina Charalampidou
language : en
Publisher:
Release Date : 2017
Three Essays On Government Intervention In The Oil And Gas Industry written by Anastasia Christina Charalampidou and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
From resource nationalism to 'softcore' government intervention through regulatory changes, this thesis attempts to comprehend in depth and formally analyse both the economic as well as the non-financial factors influencing the development of hydrocarbon resources and the investment decision-making in the oil and gas industry. The empirical work of Chapter 1 is inspired by the competition between IOCs ad NOCs and the phenomenon of resource nationalism. It provides empirical evidence on how the socio-economic conditions can affect the way a country will choose to develop its natural resources presenting the social determinants which contribute to the rise of nationalisation in the oil and gas industry. Chapter 2 focuses on government intervention on the upstream pipeline transportation networks and the issue of third party access under conditions of natural monopoly. It applies basic regulatory economic principles on oil and gas transportation networks and explores various regulatory tools and their application in different basins. Special focus is given in the government intervention and the market conditions under which State interference in the market is justified and successful. Finally, Chapter 3, taking into consideration the theory developed in Chapter 2, provides policy recommendations which aim to tackle market inefficiencies in the UKCS for the utilisation of the remaining reserves. The chapter also discusses the role and limitations of government ownership in the UKCS. The three chapters analyse different, but interlinked, issues surrounding the relationship between the government and the oil and gas industry- from hardcore nationalisation of the natural resources to the unique Norwegian model of State ownership.
Essays On The Effects Of Market Regulation
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Author :
language : en
Publisher:
Release Date : 2015
Essays On The Effects Of Market Regulation written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Essays On Strategic Behavior In Government Designed Markets
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Author : Gastón Illanes
language : en
Publisher:
Release Date : 2016
Essays On Strategic Behavior In Government Designed Markets written by Gastón Illanes and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This thesis studies consumer behavior and strategic interactions between firms in markets that were actively designed by governments. In such settings, government intervention is frequent, firms are often constrained in their actions, and consumer behavior may depart from what is predicted by the standard set of assumptions. The chapters of this thesis study how the current set of regulations is affecting market outcomes in different settings and what can be done to improve them. Chapter 1 studies the Chilean pension system, where workers' mandatory contributions are administered by private companies. This market exhibits fee dispersion and low switching rates, which could be explained by firm differentiation or by switching costs. Using a novel combination of revealed preference inequalities and latent variable integration techniques, I find evidence of large switching costs, and that if these costs did not exist prices would fall to around one-half of currently observed levels. Chapter 2 is a pre-cursor to Chapter 1, studying what would be learned from estimating demand in this market using a more standard set of techniques. I find that ignoring switching costs, individual-level heterogeneity, and endogeneity will lead to implausible demand estimates. These results are the key motivation for the use of the more sophisticated methods used in Chapter 1. Finally, Chapter 3, written with Sarah Moshary, studies the privatization of liquor sales in Washington state. It focuses on a natural experiment induced by privatization, which creates exogenous variation in the number of elegible licensees in local liquor markets, generated by a licensure threshold requirement on store size: only stores larger than 10,000 square feet are allowed to sell liquor. We find that this regulation does not alter the total number of liquor outlets within each market. Instead, it shifts the composition of stores. Also, we find that in markets with an additional potential entrant the product mix is shifted towards cheaper products. This confirms concerns that competition in liquor markets leads to greater availability of cheap alcohol, and suggests that regulation has an effect in limiting the availability of those types of products.
Essays In Competition And Entry Regulations
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Author : Valeria Bernardo
language : en
Publisher:
Release Date : 2017
Essays In Competition And Entry Regulations written by Valeria Bernardo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
There is no consensus in economic literature to which extent should the government intervene in a country's economy. However, economists agree that whenever there is a market failure, the market do not allocate resources properly and the government intervention is needed. In such cases, the government might be able to fix the problems, although policies might succeed making the markets work properly or might have undesired consequences. The measures taken in these cases by governments may go from using state-owned of resources (taxes, subsides or state-own firms) to many types of regulations. Analysing the actual impact of policies and regulations, and discussing its desired and undesired effects, is central for incresasing the quality of the debates regarding the pros and cons of policy interventions, and helping the public in the decision makint that trade-offs the costs and benefits of regulations when it is difficult to know whether policies are needed, are adequate and are cost-effective in pursing the desired social goals.
Essays On The Economics Of Capital Markets Regulation
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Author : James Cameron Spindler
language : en
Publisher:
Release Date : 2010
Essays On The Economics Of Capital Markets Regulation written by James Cameron Spindler and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Capital market categories.
State Market And Social Regulation
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Author : Peter Lange
language : en
Publisher: Cambridge University Press
Release Date : 1989-09-29
State Market And Social Regulation written by Peter Lange and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1989-09-29 with Business & Economics categories.
The essays in this volume provide a systematic analysis of the contemporary means of regulation employed in a range of economic and social policy areas in Italy.
Regulation Markets And Integrity
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Author : Edward A. Morse
language : en
Publisher:
Release Date : 2014
Regulation Markets And Integrity written by Edward A. Morse and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
The quest for security entails agency relationships, whether protecting ourselves from the rogues and vandals of the Internet, or protecting our personal information in the hands of commercial actors. Firms that provide the technology to provide network security generally do so without significant government regulation. However, the protection of personal information has become increasingly regulated, particularly in Europe. Although in the U.S. private ordering and self-regulation has prevailed, additional regulation may be on the horizon. This essay discusses market forces and legal interventions affecting private ordering and self-regulation, with particular attention to the matter of trust and the role of third-party monitoring in enhancing the trust regime. Using the agency theories of Jensen and Meckling, the essay probes an analogy between consumers and bondholders in a firm, and posits the need for attention to standards and practices for monitoring to enhance the prospects of consumer trust. It concludes with a brief look at integrity as promoted by Jensen and by DeMulder as an additional approach to enhance trust.