Publications by PSE researchers

We investigate the impact of different public transport pricing schemes on daily commuting habits. Psychological inertia, car stickiness, complexity aversion, or skewed perception of prices are expected to influence decisions. We build a controlled experiment, where participants make transport decisions and face various public transport tariffs. Our findings indicate that players are rational as they reach the Nash predictions of our model, but cognitive biases inherent to users are also present. Peak/offpeak and two-part tariffs prove to be more successful in encouraging public transit use than flat fare subscriptions, possibly due to a preference for flexibility and the ability to take past experiences into account (congestion and incident) in future travel choices. Thus, this paper suggests that well designed pricing strategies are useful tools to promote public transit use and reduce road congestion.

After electricity liberalization, the “energy-only market” design lacks effective incentives to invest in new capacity. Across the world, capacity remuneration mechanisms have been taking hold as an alternative to the energy-only market to ensure adequate power generation capacity. The way these designs are characterized reflects the insight from general economic theory on market power and strategic behavior. Indeed, Europe is heading toward a patchwork of different, uncoordinated national mechanisms. In practice, design choices are driven by national policies, needs and constraints. In addition, they are progressively converging toward a market-based mechanism with a forward period and market power mitigation. In this paper, we investigate their efficiency properties in terms of new investments, the reduction in unserved energy frequency and the energy prices of a generic capacity remuneration mechanism that is impervious to the so-called forward capacity market. The results from laboratory experiments confirm that this mechanism gives better incentives to invest in new capacity than the energy-only market alone and provides an empirical understanding of the investment decision process. The forward capacity market contributes to lower energy market prices in peak demand and extra-high peak demand periods and average energy costs if we consider the social cost of unserved energy.

Face aux défis du changement climatique, la révolution de la mobilité durable tant attendue et annoncée tarde à se concrétiser. Les transports sont encore responsables du tiers des émissions de gaz à effet de serre en France (dont 72 % pour le transport routier), 24 % au niveau mondial, et sont le seul secteur où elles continuent d’augmenter par rapport à 1990 (le ralentissement lié aux restrictions de déplacement pendant la pandémie en 2020 constituant une parenthèse). La décarbonation de la mobilité est pourtant un impératif pour respecter les engagements du pays d’atteindre la neutralité carbone en 2050 ce qui impose des étapes tout aussi ambitieuses et contraignantes. En 2030, l’Europe va obliger beaucoup de secteurs de l’industrie, dont les transports, à réduire leurs émissions de CO2 de 55 % par rapport au niveau actuel ce qui se traduit pour les constructeurs de véhicules légers par la nécessité de vendre des véhicules qui émettent en moyenne 55 % de moins de CO2 que les véhicules vendus en 2021. En 2035, la vente de véhicules thermiques neufs sera tout simplement interdite. Pourtant, des changements ont eu lieu mais à un rythme trop lent qui ne permet pas le passage à l’échelle : les usages de la mobilité évoluent, l’industrie innove avec une perspective technologique favorable du côté des véhicules électriques, les investisseurs publics et privés poursuivent leurs engagements dans des projets d’infrastructures et les politiques publiques sont mises en œuvre à tous les niveaux pour promouvoir la mobilité durable.

Electricity and water tariffs are undergoing significant changes due to smart metering, retail competition, and regulatory changes. Consumers now have to choose between different tariffs which are getting more and more complex. Theoretically, these new tariffs aim to use more cost-reflective pricing to incentivise consumers to adopt the right behaviours. However, empirical evidence from real pricing shows that consumers are confused by the complexity. Based on a lab experiment, this paper investigates how electricity and water consumers adopt more or less complicated tariffs and adapt their behaviours accordingly. We show that subjects prefer simple tariffs over complex ones. However, when they receive adequate information about tariffs and appropriate behaviours, they choose more complex tariffs. These results argue in favour of self-selection of tariff forms, in order to account for consumers’ different abilities to respond to the price signal. Lastly, we discuss the appropriateness of using a price mechanism to incentivise consumers.

We consider the regulation of the tariffs charged by a public utility in the electricity sector. Consumers differ in terms of their privately known demands. When regulating a firm's tariffs, the government is concerned by the redistribution across consumer classes. A conflict between redistribution and screening induces pricing distortions when the firm is a monopoly. Introducing competition with an unregulated fringe improves efficiency but jeopardizes redistribution. In response to this problem, the government may now want to manipulate information about the incumbent's cost to restrict entry and better promote its own redistributive objective. To prevent such obstacle to entry, the government's discretion in fixing the incumbent's regulated tariffs should be restricted by imposing floors or caps on those tariffs and/or by controlling the market share left to the competitive fringe. We highlight the determinants of such limits on discretion and unveil to what extent they depend on the government's redistributive concerns.

This chapter deals with corruption, favoritism, and collusion practices that economists call horizontal and vertical agreements. The authors first introduce the organization of such agreements, how damageable they are, and the way one can fight against these practices. Then, they propose to focus on the auction theory and mechanism design as a way to prevent vertical and horizontal agreements. Indeed, when it comes to complex contracts such as PPPs, negotiated procedures or adaptation of traditional procedures have the potential both to ensure competition and to provide the necessary flexibility to deal with skills and information asymmetries. The authors insist on the need of a robust institutional framework to ensure the credibility of ex ante mechanisms as well as of ex post sanctions.

Since the late eighties, governments have designed telecommunication policies aiming at introducing competition. This implies new regulation framework and privatization of State Owned Enterprises (SOEs). This paper empirically assesses the effect of reforms sequences in the telecommunications sector on the sector performance, by using a sample of 17 Middle East North African (MENA) countries for the period 1995-2010. Countries are free to choose how to proceed notably whether to establish an Independent Regulatory Authority (IRA) before or after privatizing the SOEs, as well as they can create an IRA before introducing competition rather than after. We assume that the choices of reforms sequences are affected by institutional, political and economic variables. We use IV-2SLS estimation to analyze the outcome of reforms sequences in terms of telecom performance (access, prices, productivity and quality). We find that an IRA established before privatizing the incumbent operator improves the sector access but with an increase in fixed prices. However, the effect of an IRA before introducing competition differs between the fixed and the mobile sector. Regulation still works as an imperfect substitute for competition in the fixed market, which is no more the case for the mobile market.

La loi sur la transition énergétique pour la croissance verte du 17 août 2015 annonce un tournant de la politique énergétique, mais c'est aussi une loi de compromis. S'appuyant sur des évolutions et des innovations déjà amorcées ces dernières années, elle entend faire entrer la dimension énergétique dans tous les domaines de la vie économique et sociale, à l'échelle locale comme à l'échelle nationale. L'objectif de cet ouvrage collectif est de mettre cette nouvelle loi en perspective, en la confrontant notamment à quatre types d’innovations : techniques (les questions de stockage ou de réseaux intelligents), institutionnelles (changements dans la gouvernance locale), instrumentrales (nouveaux outils juridiques et financiers) et comportementales (nouvelles formes de tarification, enjeux de la gestion des données personnelles).