The Experts below are selected from a list of 258 Experts worldwide ranked by ideXlab platform

Giuliano Masiero - One of the best experts on this subject based on the ideXlab platform.

  • persistent and transient productive inefficiency in a Regulated Industry electricity distribution
    Energy Economics, 2018
    Co-Authors: Massimo Filippini, William H Greene, Giuliano Masiero
    Abstract:

    The productive efficiency of a firm can be decomposed into two parts, one persistent and one transient. This distinction seems to be appealing for regulators. During the last decades, public utilities such as water and electricity have witnessed a wave of regulatory reforms aimed at improving efficiency through incentive regulation. Most of these regulation schemes use benchmarking, namely measuring companies' efficiency and rewarding them accordingly. Focusing on electricity distribution, we sketch a theoretical model to show that an imperfectly informed regulator may not disentangle the two parts of the cost efficiency. Therefore, the regulator may fail to set optimal efficiency targets, which also undermines quality. We then provide evidence on the presence of persistent and transient efficiency using data on 28 New Zealand electricity distribution companies between 2000 and 2011. First, we estimate a total cost function by means of traditional stochastic frontier models for panel data. These come up with an estimation of the persistent part or the transient part of the cost efficiency. Finally, we use the more recent generalized true random effects model that allows for the simultaneous estimation of both transient and persistent efficiency. We also find some evidence that persistent efficiency is associated to higher quality, and wrong efficiency targets are associated to lower quality compliance.

  • persistent and transient productive inefficiency in a Regulated Industry electricity distribution in new zealand
    Energy: Expectations and Uncertainty 39th IAEE International Conference Jun 19-22 2016, 2016
    Co-Authors: Massimo Filippini, William H Greene, Giuliano Masiero
    Abstract:

    The productive efficiency of a firm can be decomposed into two parts, one persistent and one transient. So far, most of the cost efficiency studies estimated frontier models that provide either the transient or the persistent part of productive efficiency. This distinction seems to be appealing also for regulators. During the last decades, public utilities such as water and electricity have witnessed a wave of regulatory reforms aimed at improving efficiency through incentive regulation. Most of these regulation schemes use benchmarking, namely measuring companies' efficiency and rewarding them accordingly. The purpose of this study is to assess the level of persistent and transient efficiency in an electricity sector and to investigate their implications under price cap regulation. Using a theoretical model, we show that an imperfectly informed regulator may not disentangle the two parts of the cost efficiency; therefore, they may fail in setting optimal efficiency targets. The introduction of minimum quality standards may not offer a valid solution. To provide evidence we use data on 28 New Zealand electricity distribution companies between 1996 and 2011. We estimate a total cost function using three stochastic frontier models for panel data. We start with the random effects model (RE) proposed by Pitt and Lee (1981) that provides information on the persistent part of the cost effciency. Then, we apply the true random effects model (TRE) proposed by Greene (2005a, 2005b) that provides information on the transient part. Finally, we use the generalized true random effects model (GTRE) that allows for the simultaneous estimation of both transient and persistent efficiency. We find weak evidence that persistent efficiency is associated to higher quality, and wrong efficiency targets are associated to lower quality compliance.

Mark A Lemley - One of the best experts on this subject based on the ideXlab platform.

  • Antitrust Law and Regulatory Gaming[dagger]
    Texas Law Review, 2009
    Co-Authors: Stacey L. Dogan, Mark A Lemley
    Abstract:

    Antitrust law promotes competition in the service of economic efficiency. Government regulation may or may not promote either competition or efficiency, depending on the goals of the agency, its competence, and the effects of Industry "capture." Antitrust courts have long included Regulated industries within their purview, working to ensure that Regulated industries cannot use the limits that regulation imposes on the normal competitive process to achieve anticompetitive ends.1 Doing so makes sense; an antitrust law that ignored anticompetitive behavior in any Regulated Industry would be a law full of holes. The role of antitrust in policing Regulated industries appears to be changing, however. A cluster of Supreme Court decisions in the past decade2 have fundamentally altered the relationship between antitrust and regulation, placing antitrust law in a subordinate relationship that, some have argued, requires it to defer not just to regulatory decisions but perhaps even to the silence of regulatory agencies in their areas of expertise.3 While many of those decisions might be justified on their facts as a matter of antitrust law,4 together they are leading courts and commentators to conclude that antitrust laws are impliedly repealed by government regulation of a particular Industry.5 The question arose most recently in Pacific Bell Telephone Co. v. UnkLine Communications, Inc.,6 in which the Supreme Court rejected a claim that a Regulated monopoly with franchised rights-of-way violates antitrust law by engaging in a "price squeeze": charging broadband competitors wholesale prices for use of the rights-of-way that exceed the retail prices its own subsidiary charges its customers.7 Absolute antitrust deference to regulatory agencies makes little sense as a matter of either economics or experience. Economic theory teaches that antitrust courts are better equipped than regulators to assure efficient outcomes in many circumstances. Public choice theory and long experience both suggest that agencies that start out trying to limit problematic behavior by industries often end up condoning that behavior and even insulating those industries from market forces. And as history has shown, relying on regulatory oversight alone without the backdrop of antitrust law would leave both temporal and substantive gaps in enforcement, which unscrupulous competitors could exploit to the clear detriment of consumers.8 The mere existence of a competition-conscious regulatory structure cannot guarantee protection against abuses of that structure or against exclusionary behavior that falls just beyond its jurisdiction.9 Indeed - and perhaps ironically - the very regulatory structure that exists to promote competition can create gaming opportunities for competitors bent on achieving anticompetitive goals. Such "regulatory gaining" undermines both the regulatory system itself and the long-standing, complementary relationship between regulatory and antitrust law. We argue that the risk of regulatory gaming provides an important example of the need for ongoing antitrust oversight of Regulated industries. We define "regulatory gaming" as private behavior that harnesses procompetitive or neutral regulations and uses them for exclusionary purposes. Complex regulatory systems - particularly those requiring government approval for market entry - can create opportunities for such gaming by enabling dominant parties to dictate Industry standards while delaying entry of competing products. The pharmaceutical Industry has witnessed this behavior for years, as branded drug companies have used exclusionary tactics to stay one step ahead of generic entry. In one species of this behavior called "product hopping" - the branded company makes repeated changes in a drug's formulation to prevent generic substitution, rather than to improve the efficacy of the drug product. Product hopping raises difficult questions for antitrust courts. On one hand, product-hopping antitrust suits require courts to inquire into product-design choices, something antitrust judges rightly take pains to avoid; they also raise concerns about courts' secondguessing agencies' and legislators' judgments about how best to balance competition and innovation in Regulated markets. …

  • antitrust law and regulatory gaming
    2008
    Co-Authors: Stacey L. Dogan, Mark A Lemley
    Abstract:

    Antitrust law promotes competition in the service of economic efficiency. Government regulation may or may not promote either competition or efficiency, depending on both the goals of the agency and the effects of Industry "capture." Antitrust courts have long included Regulated industries within their purview, working to ensure that Regulated industries could not use the limits that regulation imposes on the normal competitive process to achieve anticompetitive ends. Doing so makes sense; an antitrust law that ignored anticompetitive behavior in any Regulated Industry would be a law full of holes. The role of antitrust in policing Regulated industries appears to be changing, however. A cluster of Supreme Court decisions in the past decade have fundamentally altered the relationship between antitrust and regulation, placing antitrust law in a subordinate relationship that, some have argued, requires it to defer not just to regulatory decisions but perhaps even to the silence of regulatory agencies in their areas of expertise. Absolute antitrust deference to regulatory agencies makes little sense as a matter either of economics or experience. Economic theory teaches that antitrust courts are better equipped than regulators to assure efficient outcomes in many circumstances. Public choice theory - and long experience - suggests that agencies that start out trying to limit problematic behavior by industries often end up condoning that behavior and even insulating those industries from market forces. And as history has shown, relying on regulatory oversight alone without the backdrop of antitrust law would leave both temporal and substantive gaps in enforcement, which unscrupulous competitors could exploit to the clear detriment of consumers. The mere existence of a competition-conscious regulatory structure cannot guarantee against abuses of that structure, or against exclusionary behavior that falls just beyond its jurisdiction. Indeed - and perhaps ironically - the very regulatory structure that exists to promote competition can create gaming opportunities for competitors bent on achieving anti-competitive goals. Such "regulatory gaming" undermines both the regulatory system itself and the longstanding complementary relationship between regulatory and antitrust law. We argue that the risk of regulatory gaming provides an important example of the need for ongoing antitrust oversight of Regulated industries. We define regulatory gaming as private behavior that harnesses pro-competitive or neutral regulations and uses them for exclusionary purposes. We identify three possible instances of regulatory gaming: (1) product-hopping, in which the branded company makes repeated changes in drug formulation to prevent generic substitution, rather than to improve the efficacy of the drug product; (2) manipulation of government standard-setting organizations; and (3) claims of price squeezes by partially Regulated industries. Our goal in this paper is not to persuade the reader that these particular examples of regulatory gaming do or do not violate the antitrust laws. Rather, our point is that whether or not particular acts of regulatory gaming harm competition is and should be an antitrust question, not merely one that involves interpreting statutes or agency regulations. Some level of antitrust enforcement - with appropriate deference to firm decisions about product design and affirmative regulatory decisions that affect market conditions - provides a necessary check on behavior, such as product hopping, that has no purpose but to exclude competition.

Massimo Filippini - One of the best experts on this subject based on the ideXlab platform.

  • persistent and transient productive inefficiency in a Regulated Industry electricity distribution
    Energy Economics, 2018
    Co-Authors: Massimo Filippini, William H Greene, Giuliano Masiero
    Abstract:

    The productive efficiency of a firm can be decomposed into two parts, one persistent and one transient. This distinction seems to be appealing for regulators. During the last decades, public utilities such as water and electricity have witnessed a wave of regulatory reforms aimed at improving efficiency through incentive regulation. Most of these regulation schemes use benchmarking, namely measuring companies' efficiency and rewarding them accordingly. Focusing on electricity distribution, we sketch a theoretical model to show that an imperfectly informed regulator may not disentangle the two parts of the cost efficiency. Therefore, the regulator may fail to set optimal efficiency targets, which also undermines quality. We then provide evidence on the presence of persistent and transient efficiency using data on 28 New Zealand electricity distribution companies between 2000 and 2011. First, we estimate a total cost function by means of traditional stochastic frontier models for panel data. These come up with an estimation of the persistent part or the transient part of the cost efficiency. Finally, we use the more recent generalized true random effects model that allows for the simultaneous estimation of both transient and persistent efficiency. We also find some evidence that persistent efficiency is associated to higher quality, and wrong efficiency targets are associated to lower quality compliance.

  • persistent and transient productive inefficiency in a Regulated Industry electricity distribution in new zealand
    Energy: Expectations and Uncertainty 39th IAEE International Conference Jun 19-22 2016, 2016
    Co-Authors: Massimo Filippini, William H Greene, Giuliano Masiero
    Abstract:

    The productive efficiency of a firm can be decomposed into two parts, one persistent and one transient. So far, most of the cost efficiency studies estimated frontier models that provide either the transient or the persistent part of productive efficiency. This distinction seems to be appealing also for regulators. During the last decades, public utilities such as water and electricity have witnessed a wave of regulatory reforms aimed at improving efficiency through incentive regulation. Most of these regulation schemes use benchmarking, namely measuring companies' efficiency and rewarding them accordingly. The purpose of this study is to assess the level of persistent and transient efficiency in an electricity sector and to investigate their implications under price cap regulation. Using a theoretical model, we show that an imperfectly informed regulator may not disentangle the two parts of the cost efficiency; therefore, they may fail in setting optimal efficiency targets. The introduction of minimum quality standards may not offer a valid solution. To provide evidence we use data on 28 New Zealand electricity distribution companies between 1996 and 2011. We estimate a total cost function using three stochastic frontier models for panel data. We start with the random effects model (RE) proposed by Pitt and Lee (1981) that provides information on the persistent part of the cost effciency. Then, we apply the true random effects model (TRE) proposed by Greene (2005a, 2005b) that provides information on the transient part. Finally, we use the generalized true random effects model (GTRE) that allows for the simultaneous estimation of both transient and persistent efficiency. We find weak evidence that persistent efficiency is associated to higher quality, and wrong efficiency targets are associated to lower quality compliance.

Rodrigo Moita - One of the best experts on this subject based on the ideXlab platform.

  • Political Price Cycles In Regulated Industries: Theory And Evidence
    2020
    Co-Authors: Rodrigo Moita, Claudio Paiva
    Abstract:

    This paper develops a model of political regulation in which politicians set the Regulated price in order to maximize electoral support by signaling to voters a pro-consumer behavior. Political incentives and welfare constraints interact in the model, yielding an equilibrium in which the real price in a Regulated Industry may fall in periods immediately preceding an election. The paper also provides empirical support for the theoretical model. Using quarterly data from 32 industrial and developing countries over 1978-2004, we find strong statistical and econometric evidence pointing toward the existence of electoral price cycles in gasoline markets. (This abstract was borrowed from another version of this item.)

  • Political Price Cycles in Regulated Industries : Theory and Evidence
    IMF Working Papers, 2006
    Co-Authors: Claudio Paiva, Rodrigo Moita
    Abstract:

    This paper develops a model of political regulation in which politicians set the Regulated price in order to maximize electoral support by signaling to voters a pro-consumer behavior. Political incentives and welfare constraints interact in the model, yielding an equilibrium in which the real price in a Regulated Industry may fall in periods immediately preceding an election. The paper also provides empirical support for the theoretical model. Using quarterly data from 32 industrial and developing countries over 1978-2004, we find strong statistical and econometric evidence pointing toward the existence of electoral price cycles in gasoline markets.

Claudio Paiva - One of the best experts on this subject based on the ideXlab platform.

  • Political Price Cycles In Regulated Industries: Theory And Evidence
    2020
    Co-Authors: Rodrigo Moita, Claudio Paiva
    Abstract:

    This paper develops a model of political regulation in which politicians set the Regulated price in order to maximize electoral support by signaling to voters a pro-consumer behavior. Political incentives and welfare constraints interact in the model, yielding an equilibrium in which the real price in a Regulated Industry may fall in periods immediately preceding an election. The paper also provides empirical support for the theoretical model. Using quarterly data from 32 industrial and developing countries over 1978-2004, we find strong statistical and econometric evidence pointing toward the existence of electoral price cycles in gasoline markets. (This abstract was borrowed from another version of this item.)

  • Political Price Cycles in Regulated Industries : Theory and Evidence
    IMF Working Papers, 2006
    Co-Authors: Claudio Paiva, Rodrigo Moita
    Abstract:

    This paper develops a model of political regulation in which politicians set the Regulated price in order to maximize electoral support by signaling to voters a pro-consumer behavior. Political incentives and welfare constraints interact in the model, yielding an equilibrium in which the real price in a Regulated Industry may fall in periods immediately preceding an election. The paper also provides empirical support for the theoretical model. Using quarterly data from 32 industrial and developing countries over 1978-2004, we find strong statistical and econometric evidence pointing toward the existence of electoral price cycles in gasoline markets.