Industrial Organization and Regulation

"Corruption has become one of the most popular topics in the social scientific disciplines. However, there is a lack of interdisciplinary communication about corruption. Models developed by different
academic disciplines are often isolated from each other. The purpose of this paper is to review several major approaches to corruption and draw them closer to each other. Most studies of corruption fall
into three major categories: (i) rational-actor models where corruption is viewed as resulting from cost/benefit analysis of individual actors; (ii) structural models that focus on external forces that determine corruption; and (iii) relational models that emphasize social interactions and networks among corrupt actors. Focusing on actors’ behavior and the social context, this article explains corruption concepts taken from sociology, economics, organization studies, political science, social anthropology, and social psychology."

Because of the prominent position of urban rail in reducing urban transport-related problems, such as congestion and air pollution, insights into the costs of possible new urban rail projects is very relevant for those involved with cost estimations, policy makers, cost-benefit analysts, and other target groups. Knowledge of the differences in costs per kilometre, including explanations of differences and their breakdowns is currently lacking in the literature. This paper aims to provide a first stage insight into how cost per kilometre varies across urban rail projects. The methodology applied is a simple cost comparison across projects where the data collected are comparable. We conclude that capital costs per route-kilometre of urban rail vary highly between projects. Looking at European projects and excluding outliers, the total capital costs per route-kilometre (including stations and rolling stock) lie mainly between US$50-100 million (2002 prices). Including US projects, the range is US$50-150 million. The main reasons for the high variation in the route-kilometre costs are differences between projects as regards the ratio of underground to above-ground construction, ground conditions, station spacing, type of rolling stock, environmental and safety constraints and labour costs. We warn, however, that the observations used to reach the conclusions are too few to obtain results with statistical significance. Our results must therefore be seen as a first step towards collecting more data so that a more succinct statistical analysis can be conducted. Another conclusion is therefore that this area has future research potential.

Este paper considera el efecto del cargo por confiabilidad sobre el precio spot de la energía eléctrica en Colombia, implementado en 2006 con el fin de incentivar a los generadores existentes o nuevos inversionistas para mejorar la confiabilidad de la prestación del servicio, lo que conduce a incrementar la capacidad instalada en el mercado de energía mayorista. Se describe el funcionamiento de este mecanismo en Colombia y analiza el comportamiento de algunas variables estructurales en el funcionamiento de este mercado, como la relación entre la demanda comercial y la disponibilidad real, el fenómeno de El Niño y La Niña, el nivel de embalse y algunas medidas de carácter regulatorio. El precio spot presenta alta volatilidad haciendo que la especificación adecuada corresponda a un modelo de regresión con estructura ARCH (Engle, 1982). Los resultados obtenidos evidencian que el cargo por confiabilidad es estadísticamente significativo y positivo, es decir hace que el precio spot aumente. Además, El Niño presenta un impacto positivo sobre el precio spot, debido a la gran participación hidráulica de este mercado.

Manufacturing firms buy transport services with the aim of minimizing their total logistics cost. There is a large amount of literature analyzing how shippers value the various characteristics of a transport service, mostly performed by collecting stated-preference data and estimating discrete choice models. Most of the empirical studies specify the deterministic part of the utility functions as linear in the observed attributes. This implicitly constrains the characteristics of the analyzed transport service to be perfect substitutes, and to have a constant substitutability ratio. Such an assumption is inconsistent with the standard microeconomic theory, typically assuming inputs' decreasing marginal productivity, and may not be realistic. The paper tests the linearity assumption for freight rate, travel time, probability of having damaged and lost freight, frequency, flexibility, mode and punctuality on a sample of Italian small-and medium-sized manufacturing enterprises (SME).

The Energy Community is a bold experiment in integration, creating a regional energy market between the European Union and nine South East European partnersand the United Nations Mission on behalf of Kosovo. This paper examines the challenges posed by the application of the EU model of energy regulation and the acquis communautaire, and the ability of States to meet those challenges. An investigation of governance in the countries of South East Europe (SEE), including analysis based on the World Bank's Worldwide Governance Indicators, suggests a lower overall performance of governing institutions in SEE, compared with countries of the EU 25. The paper, therefore, considers whether the EU energy model is appropriate in South East Europe at this stage. The EU model confers certain institutional resources, but at the same time imposes significant costs of compliance with the energy chapter of the acquis. It remains to be seen which of these two opposing factors will dominate, but the analysis suggests that for some countries in the region, regulatory reform alone may not be sufficient. (K. Wright). 1 At first sight, the energy sector (and electricity, in particular) seems well-suited to provide such a demonstration effect, given the potential benefits from market integration in terms of efficiency, security of supply and sustainability (as discussed by ).

Solar Radiation Management (SRM) has been suggested as a technique to counteract some of the changes expected as a result of Anthropogenic Global Warming (AGW).1 It has been suggested2 that SRM could be carried out by commercially motivated actors. This process has been envisaged as using the Voluntary Carbon Offset (VCO) market as a mechanism for monetising the SRM process, due to the secondary effects of SRM on the carbon cycle.3 Current VCO customers are typically businesses: those looking to be ‘carbon neutral’ or reselling offsets alongside high-carbon goods and services (for example, airlines). Other potential VCO customers include states, or philanthropists. In this short scoping paper we provide a broad overview the issues of regulation and legitimacy, as may be applicable to the activities of future commercial SRM actors. We discuss the need for a two-pronged regulatory approach, encompassing first legal and corporate regulation and second, scientific and technical regulation. In conclusion, we identify differing regulatory requirements, according to whether the intended effect on the climate system of the SRM industry, or of individual firms, can be regarded as de minimis. We additionally suggest the use of a two-tier marketplace structure in order to ensure regulatory demands can be efficiently and transparently enacted.

The Asian style of regional integration may be seen as a “quasi-common economy” that eschews a formal linkup in political
or monetary terms, but manages to generate similar results by strong physical integration and distributed chains of production
and service delivery. This note proposes the Asian quasi-common economy as a benchmark for South America’s regional
integration efforts because it is a better fit than the politically driven, broad-based, European style integrative process

Nations set countervailing duties equal to the amount of subsidy granted to the exporter, ignoring questions of the effects of the subsidy on import prices. The 2011 WTO Appellate Body decision in US -Antidumping and Countervailing Duties (China)), followed by conforming changes in U.S. law in 2012, has brought a renewed focus on the pass-through of subsidies to price. This paper reconsiders the theory concerning subsidy pass-through, refining the existing literature and extending the theory to the important case of subsidized fixed factors of production. This allows an appraisal of the role and effectiveness of countervailing measures generally and of recent U.S. attempts to measure pass-through in particular.

This paper studies the efficacy of entry threats in a contestable environment using experiments. It is hypothesized here that the entrant firm’s home market profits influence the entrant’s competitive behavior even when entry is costless and completely reversible. In the experiment, entrants and incumbents tacitly collude when each has its own monopoly market. In contrast, an entrant from a competitive market practices hit-and-run entry whenever such opportunities exist, forcing the incumbent monopolist to price at average cost. The experiment results suggest that the usefulness of hit-and-run competitive threat in a contestable environment depends crucially on the relative profits in the entrant’s and the incumbent’s home and entry markets.

In this paper, we investigate the theoretical and empirical relevance of the distinction between generic goods and specific goods for the understanding of freight transport demand. Specific goods are Taylor-made for a single customer while generic goods are produced irrespective of the final customer who will buy them. Theoretically, the distinction lays on a different relationship with time, based for specific goods on a trade-off between transport duration and cost, and for generic goods on optimal stock. The distinction affects shippers' valuation of freight transport attributes such as value of time, value of transport time reliability and value of the risk of loss and damages. The theoretical analysis has not so far been able to establish conclusively how shippers' valuation of freight transport attributes is affected by the type of good produced. Hence, some empirical evidence derived from stated preference data collected among Italian shippers is used to shed some light on the topic.