Differentiated interchange fees

Payment networks typically differentiate interchange fees across different merchant sectors. This paper shows that it is generally efficient for a regulator to leave the decision on the structure of interchange fees to payment networks.     

Explaining cross-supplies

Cross-supplies describe the phenomenon that two or more firms in the same industry supply each other with their final products. A prominent example is the cooperation in the European flat-glass industry, which was recently criticized by the European Commission. In a simple model we attempt to explain what incentives firms may have to use cross-supplies (instead of producing the goods themselves) and what welfare effects cross-supplies have if they are used. Contrary to the ruling of the European Commission we find that cross-supplies improve welfare whenever they are employed. Furthermore, for a large range of parameters, they even benefit consumers.     

Effluent fees and market structure

This paper explores the efficiency properties of a system of effluent fees in a mixed economy in which polluting agents take a variety of organizational forms: private monopoly, the managerial firm, regulated firms, and public bureaus. The analysis, including some crude empirical estimates, suggests that the welfare gains from pollution control are likely to dwarf in magnitude the potential losses from the various imperfections in the economy. The tentative conclusion is that the case for a system of fees that is invariant with respect to organizational form is not seriously compromised by likely deviations from competitive behavior.     

Tuition fees and equality of university enrolment

Abstract .  The relationship between tuition fee changes and the university enrolment of youth by parental income group in Canada is investigated. Comparisons between youth from Canadian provinces that increased tuition fees sharply in the 1990s and youth from provinces that instituted fee freezes were integral to identifying the relationship. Tuition fee increases coincided with reductions in the university enrolment of low-income youth, but with significantly smaller changes in the university enrolment of other youth. The relationships between government funding of universities and cohort size and university enrolments are also analyzed.