Entry and competition in freight transport : the case of a prospective transalpine rail link between France and Italy

We analyze the expected effects of building a rail tunnel between Lyon and Turin on i) the market shares of the established and the new suppliers, and ii) consumer surplus. The prospective project consists of a 53km rail tunnel providing freight shippers with a new alpine path. We calibrate an equilibrium model where freight shippers choose a mode and alpine path to ship goods from a given origin to a given destination. Freight carriers strategically set prices for the differentiated products they supply. Deriving the market equilibrium, we simulate the entry of a quality-improved product and test its competitive viability. The prospective alpine path proves both competitive and welfare-enhancing on the regional market, loses its competitive edge on the wider North-South market, and leads to a modal shift on the West-East market. We argue that the new infrastructure is only one tool out of a global modal shift-oriented policy toolbox

Complicating to Persuade?

This paper addresses a common criticism of certification processes: that they simultaneously generate excessive complexity, insuficient scrutiny and high rates of undue validation. We build a model of persuasion in which low and high types pool on their choice of complexity. A natural criterion based on forward induction selects the high-type optimal pooling equilibrium.When the receiver prefers rejection ex ante, the sender simplifies her report. When the receiver prefers validation ex ante, however, more complexity makes the receiver less selective, and we provide sufficient conditions that lead to complexity inflation in equilibrium

Entry and competition in freight transport : the case of a prospective transalpine rail link between France and Italy

We analyze the expected effects of building a rail tunnel between Lyon and Turin on i) the market shares of the established and the new suppliers, and ii) consumer surplus. The prospective project consists of a 53km rail tunnel providing freight shippers with a new alpine path. We calibrate an equilibrium model where freight shippers choose a mode and alpine path to ship goods from a given origin to a given destination. Freight carriers strategically set prices for the differentiated products they supply. Deriving the market equilibrium, we simulate the entry of a quality-improved product and test its competitive viability. The prospective alpine path proves both competitive and welfare-enhancing on the regional market, loses its competitive edge on the wider North-South market, and leads to a modal shift on the West-East market. We argue that the new infrastructure is only one tool out of a global modal shift-oriented policy toolbox

Du Smic au niveau de vie : composantes et évolutions

Prady Delphine, Tavan Chloé, Favrat Adélaïde. Du Smic au niveau de vie : composantes et évolutions. In: Economie et statistique, n°448-449, 2011. pp. 29-47

Errors in Project Approval and Mandatory Review

We compare two processes for society to review projects: one that is entirely based upon the initiative of interested parties, and one that first submits projects to a nonpartisan and mandatory review. In the first case, the default outcome is approval and projects are carried out without prior authorization. In the second case, the mandatory review results in either approval or rejection of submitted projects. In either case, private parties can contest the outcome and initiate a definitive review. Since the second review overrules the first one, the mandatory review may seem redundant. However, the mandatory review can improve the decision of private parties to initiate a definitive review. Thanks to private parties' improved decision making, mandatory review can lead to a reduction of both type I and type II errors.

WP/16/85 Power It Up: Strengthening the Electricity Sector to Improve Efficiency and Support Economic Activity IMF Working Paper Western Hemisphere Department Power It Up: Strengthening the Electricity Sector to Improve Efficiency and Support Economic Act

Abstract Poor performance of the electricity sector remains a drag to economic efficiency and a bottleneck to economic activity in many low-income countries. This paper proposes a number of models that account for different equilibria (some better, some worse) of the electricity sector. They show how policy choices (affecting insolvency prospects or related to rules for electricity dispatching or tariff setting), stochastic generation costs, and initial conditions, affect investment in generation and electricity supply. They also show how credible (non-credible) promises of stronger enforcement to reduce theft result in larger (smaller) electricity supply, lower (higher) government subsidies, and lower (higher) tariffs and distribution losses, which in turn affect economic activity. To illustrate these findings, the paper reviews the experience of Haiti, a country stuck in a bad equilibrium of insufficient supply, high prices, and electricity theft; and that of Nicaragua, which is gradually transitioning to a better equilibrium of the electricity sector. JEL Classification Numbers: Q43, Q47, Q4