Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market

This paper investigates how regulators influence outcomes in regulated markets when their decisions are subject to the threat of court review. We develop a theoretical model that provides a number of behavioural implications when (i) all regulators' dislike having their decisions overturned by...

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Detalles Bibliográficos
Autores: Söderberg, Magnus, Menezes, Flavio, Santolino, Miguel
Tipo de recurso: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2018
País:España
Institución:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
Repositorio:Recercat. Dipósit de la Recerca de Catalunya
OAI Identifier:oai:recercat.cat:2445/122139
Acceso en línea:https://hdl.handle.net/2445/122139
Access Level:acceso abierto
Palabra clave:Energia elèctrica
Reglaments
Reguladors elèctrics
Suècia
Electric power
Regulations
Electric controllers
Sweden
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spelling Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity marketSöderberg, MagnusMenezes, FlavioSantolino, MiguelEnergia elèctricaReglamentsReguladors elèctricsSuèciaElectric powerRegulationsElectric controllersSwedenThis paper investigates how regulators influence outcomes in regulated markets when their decisions are subject to the threat of court review. We develop a theoretical model that provides a number of behavioural implications when (i) all regulators' dislike having their decisions overturned by courts, (ii) inexperienced regulators care more about not having their decisions overturned than experienced regulators, and (iii) experienced regulators also care about consumer surplus. The theoretical implications are tested using a database of Swedish regulatory decisions from the electricity distribution sector. We provide empirical evidence that inexperienced regulators are more likely to set higher regulated prices than experienced regulators, and as the complexity of the case increases, there are on average more overturned decisions and higher prices for inexperienced regulators. The links between experience, complexity and regulatory outcomes are both statistically and economically significant. Simulations show that if those decisions that were not appealed had been appealed, then the court would have lowered the prices by 10% on average.Elsevier Ltd2018202220182018info:eu-repo/semantics/articleinfo:eu-repo/semantics/acceptedVersion9 p.application/pdfhttps://hdl.handle.net/2445/122139Articles publicats en revistes (Econometria, Estadística i Economia Aplicada)reponame:Recercat. Dipósit de la Recerca de Catalunyainstname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)InglésVersió postprint del document publicat a: https://doi.org/10.1016/j.eneco.2018.03.006Energy Economics, 2018, vol. 71, num. March, p. 302-310https://doi.org/10.1016/j.eneco.2018.03.006cc-by-nc-nd (c) Elsevier Ltd, 2018http://creativecommons.org/licenses/by-nc-nd/3.0/esinfo:eu-repo/semantics/openAccessoai:recercat.cat:2445/1221392026-05-29T05:05:01Z
dc.title.none.fl_str_mv Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
title Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
spellingShingle Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
Söderberg, Magnus
Energia elèctrica
Reglaments
Reguladors elèctrics
Suècia
Electric power
Regulations
Electric controllers
Sweden
title_short Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
title_full Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
title_fullStr Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
title_full_unstemmed Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
title_sort Regulatory behaviour under threat of court reversal: theory and evidence from the Swedish electricity market
dc.creator.none.fl_str_mv Söderberg, Magnus
Menezes, Flavio
Santolino, Miguel
author Söderberg, Magnus
author_facet Söderberg, Magnus
Menezes, Flavio
Santolino, Miguel
author_role author
author2 Menezes, Flavio
Santolino, Miguel
author2_role author
author
dc.subject.none.fl_str_mv Energia elèctrica
Reglaments
Reguladors elèctrics
Suècia
Electric power
Regulations
Electric controllers
Sweden
topic Energia elèctrica
Reglaments
Reguladors elèctrics
Suècia
Electric power
Regulations
Electric controllers
Sweden
description This paper investigates how regulators influence outcomes in regulated markets when their decisions are subject to the threat of court review. We develop a theoretical model that provides a number of behavioural implications when (i) all regulators' dislike having their decisions overturned by courts, (ii) inexperienced regulators care more about not having their decisions overturned than experienced regulators, and (iii) experienced regulators also care about consumer surplus. The theoretical implications are tested using a database of Swedish regulatory decisions from the electricity distribution sector. We provide empirical evidence that inexperienced regulators are more likely to set higher regulated prices than experienced regulators, and as the complexity of the case increases, there are on average more overturned decisions and higher prices for inexperienced regulators. The links between experience, complexity and regulatory outcomes are both statistically and economically significant. Simulations show that if those decisions that were not appealed had been appealed, then the court would have lowered the prices by 10% on average.
publishDate 2018
dc.date.none.fl_str_mv 2018
2018
2018
2022
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/acceptedVersion
format article
status_str acceptedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/122139
url https://hdl.handle.net/2445/122139
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Versió postprint del document publicat a: https://doi.org/10.1016/j.eneco.2018.03.006
Energy Economics, 2018, vol. 71, num. March, p. 302-310
https://doi.org/10.1016/j.eneco.2018.03.006
dc.rights.none.fl_str_mv cc-by-nc-nd (c) Elsevier Ltd, 2018
http://creativecommons.org/licenses/by-nc-nd/3.0/es
info:eu-repo/semantics/openAccess
rights_invalid_str_mv cc-by-nc-nd (c) Elsevier Ltd, 2018
http://creativecommons.org/licenses/by-nc-nd/3.0/es
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv 9 p.
application/pdf
dc.publisher.none.fl_str_mv Elsevier Ltd
publisher.none.fl_str_mv Elsevier Ltd
dc.source.none.fl_str_mv Articles publicats en revistes (Econometria, Estadística i Economia Aplicada)
reponame:Recercat. Dipósit de la Recerca de Catalunya
instname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
instname_str Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
reponame_str Recercat. Dipósit de la Recerca de Catalunya
collection Recercat. Dipósit de la Recerca de Catalunya
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,198674

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