Optimal Regulations Research Articles

A Study on the Design of Incentive Contracts for Platform Economy Regulation Based on Dual Principal–Agents

A system of incentives can be established to encourage several parties to unite as a community of interest and become jointly committed to the platform economic governance. The platform economy involves progressively more complex subjects of interest and relationships, which are not the typical principal–agent one-time cooperative relationship. This study investigates the problem of regulatory incentives in the platform economy, specifically focusing on the relationship between the government, platform enterprises, and merchants. It analyzes this issue under conditions of asymmetric information by constructing and solving a dual principal–agent model. The findings indicate the following: (1) the government’s incentives and regulatory mechanisms can be considered as interchangeable to some extent, with decisions made by evaluating their respective costs; (2) the government’s optimal incentives and regulations ultimately shape the self-regulatory behavior of merchants through platform enterprises; and (3) the optimal level of incentives for both the government and the platform enterprise is influenced by factors such as the ability coefficient, the social transformation coefficient, and the merchants’ reliance on the platform enterprise. Additionally, the optimal effort level of the platform enterprise and the merchants increases with higher levels of the regulatory effort, risk sensitivity coefficient, and ability coefficient. A win–win scenario and a long-term, stable cooperative partnership can be reached by the three parties under the ideal incentive intensity. The study’s conclusions can serve as a theoretical foundation and support for the creation of incentive contracts for platform economy regulation.

Carbon emission scenario simulation and policy regulation in resource-based provinces based on system dynamics modeling

In China, numerous cities are resource-based, with substantial energy consumption, emissions, and pollution and they expand quickly and economically, notably enhancing their carbon emissions. Nevertheless, they have considerable potential for emission reduction. Assuming the “dual-carbon” goal as a backdrop, this study considered Shanxi Province, the largest coal resource-based province in China, for a case in point. It established a carbon emission system dynamics model, constructs five carbon emission systems, namely, economy, energy, population, land, and environment, and sets up four scenarios. Finally, in light of the scenario simulation's outcomes, we explored the optimal path and policy regulations for resource-based cities to reach carbon peaks. The study conclusions show the following: (1) All factors are exhibit correlated with each other, and their influence in the four scenarios is ranked as follows: GDP, energy consumption, industrial structure, total population, land-use structure. (2) Although GDP is a key factor influencing total carbon emissions, regulating only a single factor cannot achieve the carbon emission target. Thus, all factors need to be considered and synergistically regulated to achieve optimal carbon benefits. (3) Carbon emissions are higher and grow faster in the Baseline Development Scenario and the Fast Development Scenario, particularly in the FDS scenario, where they reach 614.48 million tons. Both scenarios exceed the peak carbon target by 4.4% and 7.1%. (4) In the Low-Carbon Optimization model and Resource Saving Scenario have low and slow-growing carbon emissions. Although the RSS has lower carbon emissions of 539.83 million tons, sacrificing sustainable development to reduce these emissions is unrealistic. In comparison, the LOS scenario represents the optimal path for achieving sustainable growth and lowering carbon emissions in Shanxi Province, with emissions totaling 550.99 million tons. This study implements strategies to manage the pace of population expansion, optimize the industrial structure, modify the energy structure, and optimize the allocation of land resources. The results of the study not only do our findings offer data reinforcement and implementation strategies for the low-carbon conversion of similar resource-based cities in China, but also offer case studies for different kinds of resource-based cities that fulfill the “carbon peak” objective.

Assessing the Energy Performance and Retrofit Potential of the 1980–1990s’ Residential Building Stock in China’s Jiangsu Province: A Simulation-Based Study

The building operation sector in China represents 22% of the national energy consumption and 22% of the carbon emission, of which urban residential buildings accounted for 24% in 2019. Such figures for the housing sector are projected to increase sharply in the near future, while China aims to peak CO2 emissions by 2030 and reach neutrality before 2060. To reduce the impacts of the urban housing sector and address the energy use and waste generated by large-scale demolition and reconstruction, the central government started promoting the energy retrofit of urban residential buildings, raising such policies to the national strategic level. Jiangsu Province is one of the most urbanised, with a rapid growth in the energy consumption of residential buildings. The Multi-Danyuan and Single-Danyuan Apartment built in 1980–1999 are the most representative residential types in its urban areas. While still adequate functionally, they were designed and built to low energy standards and show significant potential for energy retrofit. Nonetheless, their current performance and energy-saving potential are under-researched, while more detailed and reliable data would be critical to support retrofit design and policy making. This study investigates and characterises the typical use and energy performance of the two building types. Additionally, seven measures and six retrofit scenarios were identified based on the optimal energy reductions and regulations from selected countries. The simulations indicate that, without intervention, the energy consumption of the typical urban residential buildings can reach 122 kWh/m2 under the typical high-energy user scenario. By selecting a set of effective energy-saving measures, the operational energy use for heating and cooling can be reduced by up to 52.4%. Current local standards prove cost-efficient, although less effective in reducing energy use compared to international best practices, indicating potential improvements to the contribution of building retrofit towards achieving the national carbon reduction goals.

Evidence from Albania: local government, public goods, and the free-rider problem

Public goods and their benefits are necessarily related to their nature. From an economic point of view, citizens are always looking for more and more public goods, judging that they should always finance them even less. Especially in a democracy, it is sufficient to remember that people who don't vote still benefit from the government's agenda. Mainly in developing countries and especially in ex-communist ones, the public does not have enough literacy and interest to understand the issues of public finance, political economy, the fiscal system, legal and political systems, social paradigms, and economics. So, it generally attributes the provision of public goods necessarily to the central and local governments without understanding or knowing any of the elements of the public goods ecosystem. So it seems that everything that the local government provides must be of high quality and be free, which proves evidence and traces of one of the main problems of public goods, which is the free-rider problem. From the research point of view, regardless of the moderation made by the civil society for the awareness of the social contract as well as the transparency of the economic activity of the municipalities, the citizens' awareness about the nature and problems of the provision of public goods still remains a concern. Therefore, the purpose of this article is to address the free-rider problem as an issue that must be recognized and considered so that optimal local legal regulations can be formulated, especially in small communities like Vlora municipality, where the free-rider problem is on a smaller scale compared to larger municipalities in the world.

Empirical linkages of the construction sector, intensive energy consumption, and economic openness with chemical oxygen demand pollution.

Though construction sector development and economic openness contribute to regional economic development, they have also been debated to pose some environmental challenges. Along these lines, we explored the long- and short-term connections of intensive energy consumption, economic openness, and construction sector development with the chemical oxygen demand throughout the scales of regional development of China's 30 provincial units over the 2004-2021 period. Theoretically, we contribute to the existing knowledge by incorporating chemical oxygen demand pollution, construction sector development, and economic openness to the Kaya identity's baseline framework. Empirically, we apply a series of advanced methods of panel data econometrics for robust results. Our key findings are as follows: First, we revealed a long-term stable cointegrating association among our variables of interest. Second, using the common correlated effect mean group estimator, we unfolded that the intensive energy consumption showed a chemical oxygen demand pollution reduction influence in both the long and short term, demonstrating the most substantial influence in the high regional development panel while expressing the least powerful influence the least regional development setting. Third, we unveiled that economic openness and construction sector development showed a linear chemical oxygen demand pollution enhancement influence in moderately and least developed regions. Nevertheless, both established an inverted U-shaped linkage with chemical oxygen demand pollution for the whole country as well as for high regional development data samples. Eventually, we found consistent estimates across long- and short-term investigations regarding signs of relationships; however, long-term effects remained more powerful than short-term ones. These findings would serve as factual scientific knowledge to help local as well as national governments create the optimal environmental regulations for the construction sector to achieve the sustainable development goals (SDGs), especially the Climate Action Plan (i.e., SDG-13).

The impact of a systemic tax on bank capital holdings, optimal capital requirements and social welfare

Existing studies suggest levying a systemic risk tax on systemically important banks to cover the costs of governmental interventions in (bailing out) these banks in the case of their bankruptcies. We develop a static model to investigate how this tax would affect the banks' equilibrium capital holdings and its impacts on banks’ optimal capital regulations in terms of social welfare. We find that this tax would not only result in a safer banking system but would also help to mitigate the pro-cyclical effects of banking capital requirements. However, these merits would come at the cost of an increase in loan rate. Moreover, the improvements of the tax are less pronounced when the capital requirements are relatively strict as, for example, in Basel III. Regarding welfare, Basel II is closer to the optimal level. Although Basel III results in a safer banking system, this improvement compromises social welfare. Our findings also suggest that regulators should set higher capital requirements for systemically important banks, which is similar to the rules in Basel III.

Ready or not? Constructing the Monetary Union Readiness Index

Abstract While all EU Member States can join the group's monetary union, the euro area, some members are far more ready for the adoption and use of the single European currency. Here, we construct a new Monetary Union Readiness Index (MURI) for the EU Member States. The theoretical framework of the index is built on the economic theory of Optimal Currency Areas and EU regulations such as the Treaty and the Maastricht criteria, and the Regulation on the Macroeconomic Imbalance Procedure. The index measures (i) nominal convergence, (ii) real convergence, and (iii) macroeconomic stability. The MURI Index provides an easy to use real-time policy tool to evaluate both candidate and current euro area members. Hence, it complements, aggregates and communicates key information in annual convergence reports and in official statistics. Our evaluation finds that Austria, Finland, Denmark, Sweden and Germany showed the highest level of compliance with the different euro area criteria in 2018, while Greece, Cyprus, Romania, Spain, and Italy were the least compliant.

Multifunctional Ti3C2Tx MXene/Low-Density Polyethylene Soft Robots with Programmable Configuration for Amphibious Motions.

To diversify the motion modes of multifunctional soft robots capable of shape programming, we fabricate a biomimetic and programmable Ti3C2Tx MXene/low-density polyethylene (LDPE) bilayer actuator by spraying an aqueous dispersion of MXenes onto a plasma-activated LDPE film, followed by optimal thermal regulations. Because of the eminent light absorption and photothermal/electrothermal features of MXenes and the extremely mismatched thermal expansion coefficients between the two layers, the MXene/LDPE actuator can be sensitively driven by many stimuli of near-infrared light, electricity, and heat. The initial configuration of the bilayer actuator can be programmed by tuning the thermal regulation temperature, thereby assembling multiple actuation units to achieve biomimetic functions, such as artificial iris, mechanical arms, and flying birds. More importantly, in virtue of free shape cutting and programmable configuration, the MXene/LDPE bilayer actuator can perform untethered locomotion including crawling, rolling, and sailing. The soft robots can not only move on the ground in different forms but also sail on water along any designated routes and complete the surface cargo transportation driven by a near-infrared laser via the photothermal Marangoni effect. The shape-programmable methodology for the three amphibious motion modes lays foundations for wide applications of the MXene-based soft robots.

Multicomponent complex oxide media – the basics of the functional materials for electronic engineering: the selection of the promising compositions for assessing the ferrohardness

According to the optimal technological regulations, the solid solutions of two four-component systems based on lead titanate-zirconate and alkali metal niobates were prepared: (1-x) Na0.875Li0.125NbO3 – xPbTi0.5Zr0.5O3 (0.05 ≤x < 0.95, Δx = 0.025-0.10) and (1-x) Na0.875K0.125NbO3 – xPbTi0.5Zr0.5O3 (0.0 ≤x ≤1.0, Δx = 0.05-0.10). The electrophysical parameters of the solid solutions of these systems were determined and the degree of their ferrohardness and efficiency was assessed according to the main characteristics: the relative permittivity of the polarized samples, ε33T/ε0, the mechanical quality factor, Q M, the coefficient of electromechanical coupling of the radial vibration mode, Kp, the piezomodule, |d 31|. It was shown that, depending on the chemical composition and the position of the solid solutions on the phase diagram of the systems, they can be characterized by different degrees of the ferrohardness and efficiency, which made it possible to select promising compositions: ferrohard ones – for the converters with high specific power (in step-down piezotransformers, piezoelectric motors, etc.) ); of the medium ferrohardness – for highly sensitive receivers of the ultrasonic vibrations (telemetry sensors, automatic control systems, etc.); ferrosoft materials with high efficiency – in the low-frequency devices (microphones, hydrophones, deflectors of the optical systems, robotics devices, etc.).

Pollution haven effect in North-South trade: a theoretical analysis under the mixed duopoly Cournot model

ABSTRACT Utilizing the framework of the mixed duopoly Cournot model in North-South trade, this paper provides evidence that Pollution Haven Effect exists under optimal environmental regulations and discusses how it is affected by the production costs and environmental abatement costs in the developed and developing countries. We also find that under optimal environmental regulations, the heterogeneous impacts on the Pollution Haven Effect make developed countries motivated to reduce the environmental abatement costs and make developing countries more incentive to reduce the production costs.

Macroprudential Policy and Asset Liquidity

This paper develops a dynamic model to study optimal liquidity regulations for multiple assets that differ in liquidity. I show that optimal macroprudential policies are affected by asset liquidity and the multi-asset structure. Lower asset liquidity amplifies declines in asset prices and tightens the collateral constraint during financial crises, raising macroprudential taxes on debt. With multiple assets, the marginal benefit of investing in one asset is affected by cross-price elasticities of all assets, depending on trading positions and the collateral constraint's tightness. The optimal policy in the multi-asset model can differ from those in standard one-asset models in size and sign. Quantitatively, optimal macroprudential policies favor liquid assets and reduce borrowing. The policy reduces the probability of financial crises from 8% to zero and increases welfare by 1.2%. Finally, I analyze and quantify the current Basel III reform, which increases agents' liquid holdings and decreases the probability of crises. However, the policy reduces welfare, as agents overborrow and overinvest in liquid assets.

A new perspective to map the supply and demand of artificial night light based on Loujia1-01 and urban big data

The notable increase in artificial night light (ANL) induced by the rapid urbanization process has been widely studied, but a deep understanding of the supply and demand status of ANL is still lacking. This paper attempts to map the supply and demand of ANL from the human perspective by using advanced Loujia1-01 nighttime imagery and social media derived population density (PD) data, which provides a new tool for light regulation in urban management. The bivariate clustering based k-means algorithm and template matching technique are integrated to delineate mismatch regions at the block scale to further analyze the underlying reason for unbalanced status. The results showed that the high supply but low demand (HSLD) ANL status was the leading component in the mismatch regions, occupying more than 650,000 ha and mainly occurring in the city center. The HSLD proportion was considerable in terms of public services (44%), commercial (40%), industrial (39%), transportation (56%), and green space areas (53%). Moreover, the HSLD area notably increased 946 ha over time from 18:00 to 22:00. The measurements for validation obtained by field investigation showed highly linear relationship with ANL (R2 = 0.75) and PD (R2 = 0.62), and the mapping results were consistent with the actual conditions. This study reveals the highly unbalanced ANL status, and appeals to planners for the establishment of optimal lighting regulations to alleviate disruptive effects.

Hybrid neutralization and membrane process for fluoride removal from an industrial effluent

This study aims to investigate at a laboratory scale fluorides removal from an industrial wastewater having excessive F- concentration through a hybrid process combining neutralization and membrane separation. For the membrane separation operation, both Reverse Osmosis (RO) and Nanofiltration (NF) were investigated and confronted. The optimized neutralization step with hydrated lime allowed reaching fluoride removal rates of 99.1 ± 0.4 %. To simulate continuous process, consecutive batch treatments with full recirculation of membrane process brines were conducted. Despite the relatively high super saturations with respect to CaF2, no membrane cloaking was observed. The RO polishing treatment allowed decreasing the permeate fluoride concentration to 0.9 &#xb1 0.3 mg/L with a fluoride rejection rate of 93&#xb1 2% at the optimal transmembrane pressure of around 100 psi. When NF membrane was used to treat neutralization filtrate, the permeate fluoride concentration dropped to 1.1&#xb1 0.4 mg/L with a fluoride rejection rate of 88&#xb1 5% at the optimal pressure of around 80 psi. Thus, with respect to RO, NF allowed roughly 20% decrease of the driving pressure at the expense of only 5% drop of rejection rate. Both NF and RO permeates at optimal operating transmembrane pressures respect environmental regulations for reject streams discharge into the environment.

Agent-based model of the Russian banking system: Calibration for maturity, interest rate spread, credit risk, and capital regulation

ABSTRACT The Basel III regulation raised the minimum capital requirements for banks. However, its implementation may not have reduced systemic risks. Academicians investigating optimal banking regulations do not have a consensus on whether to increase or decrease capital requirements. Here, we use the agent-based approach to study capital regulation and its implications on the evolution of the banking system. We chose the Russian banking system to proxy key model parameters. We find that lower capital requirements imply higher financial stability than the Basel III regime, where the regulator requires banks to have capital over 10% of its risk-weighted assets’ amount. However, the regulatory rule to merely have a non-negative capital is the simplest solution that best fits heterogeneous economies. It produces the highest ratio of capital to assets, the least number of bank bankruptcies, and the lowest demand of banks to enter the interbank market to cover liquidity problems for all systems.

Optimal price regulations in international pharmaceutical markets with generic competition

In a two-country (home and foreign) model in which the home producer of a branded pharmaceutical product faces generic competition in each market, we analyze home's optimal policy choices regarding two major types of price regulations: external reference pricing (ERP) and direct price controls. Home's nationally optimal ERP policy lowers domestic price while maintaining the firm's export incentive. This ERP policy results in a negative international price spillover that the foreign country can (partly) offset via a local price control. Generic competition in either market reduces home's welfare gain from instituting an ERP policy. Weaker competition abroad or a greater weight on firm profits relative to consumer surplus in home's welfare function makes it more likely that home prefers an ERP policy to a price control. While international integration of national generic markets can improve welfare, such is not the case if it causes home to relax its ERP policy.

Capital regulation, deposit insurance and bank risk: International evidence from normal and crisis periods

In this paper, we examine the impact of capital regulation on bank risk and the moderating role of deposit insurance on the relationship between capital regulation and bank risk during both normal and crisis periods. Using an international sample of banks from 111 countries, our results show that stringent capital regulation reduces bank default risk, in general, during normal growth period, and this effect is not conditioned by the existence of explicit deposit insurance. Further, stringent capital regulation in place during the pre-crisis period reduces bank default risk during the crisis period, and this effect is stronger for countries with explicit deposit insurance during the pre-crisis period. These results have important policy implications to design the optimal bank regulations.

Establishing optimal forest harvesting regulation with continuous approximation

While optimal forest harvesting regulations (regional forest regeneration schedules) have been established using the linear programming technique, its modeling restriction is still a challenge in practice. In this study, we developed an alternative framework for establishing an optimal forest harvesting regulation using the continuous approximation technique. The regulation problem was reformulated as a problem to find optimal smooth control of regeneration area, thereby overcoming the difficulties in finding the global optimum for the optimization models that include nonlinear or more complex models. A seven-dimensional optimization model was developed involving efficient assurance of the convergence to a stable forest state and prohibition of clearcutting in immature stands. Using this model, we established optimal forest harvesting regulations in Nagano Prefecture, Japan. Simulated annealing was utilized to explore optimal solutions. Analyses based on extreme value theory and comparison with solutions produced by grid search indicated that the best solutions may be sufficiently close to global optima. The best solutions suggested controlling timber supply to keep prices high in the early years, due to the supply–demand log price model and the use of net present value as the objective function. Because of the low profitability of the region, the solution suggested delaying the achievement of the target state as far as possible.

Welfare effects of floor area ratio regulation on landowners and residents with different levels of income

This paper explores how Floor Area Ratio (FAR) regulations affect residents with income disparity and absentee landowners in a congested closed city. Theoretical results show that (1) an increase in FAR in a central zone may harm the utility of suburban residents due to the residential segregation pattern of heterogeneous people whereas it always increases the utility in a city with homogeneous households, and (2) how an increase in FAR changes land rents depends on the current FAR and the relative location of the zone where FAR increases. Numerical results clarify the effects of optimal FAR regulations on residents and absentee landowners. In addition, theoretical result (1) denoted above is numerically verified. Furthermore, it is found that optimal FAR gives higher benefits to high income households than to low income households regardless of the location pattern.

Hemochromatoza pierwotna — wykorzystanie krwi pochodzącej z leczniczych krwioupustów do celów klinicznych

Many countries currently witness a decline in the number of blood donors and, consequently, a decrease in supply of blood and blood components dedicated for clinical use. To improve the situation one of the measures taken is to qualify for blood donation people with diagnosed hereditary hemochromatosis (HH) — a genetic disorder that leads to iron overload, most effectively treated by frequent bloodletting to eliminate the excess of iron. Blood from therapeutic phlebotomy is often discarded. Reservations and doubts related to the clinical use of this blood are primarily related to additional factors that affect its safety. However, there is currently no convincing evidence that blood from HH donors exposes recipients to higher risk. Reservations are also raised regarding organizational challenge and costs as well as ethical concerns regarding the voluntary nature of donations. In Poland — according to current regulations — HH individuals are deferred from donating blood during the onset of disease symptoms or in the course of treatment other than phlebotomy. The decision regarding blood donation as well as frequency of subsequent donations is made by the physician in the unit of the public health service in cooperation with the doctor responsible for therapy of hemochromatosis. Guidelines regarding this group of potential blood donors markedly differ from country to country therefore numerous publications emphasize the need to develop a set of uniform, optimal regulations based on the outcome of available research.

Off-design performance of CAES systems with low-temperature thermal storage under optimized operation strategy

Compressed air energy storage (CAES) systems usually operate under off-design conditions due to load fluctuations, environmental factors, and performance characteristics of the system. However, the current research on off-design performance of CAES systems, especially in the aspects of advanced compressed air energy storage systems and operation strategies, is deeply insufficient. The complete off-design model of a compressed air energy storage system with thermal storage (TS-CAES) and optimal regulations by adjusting variable inlet guide vane (VIGV) and variable stator vane (VSV) is established for the first time. Using this model, we uncover the off-design characteristics common in TS-CAES systems caused by changes in load, ambient temperature, and operation type (constant pressure operation and sliding-pressure operation), and which is conducted under the optimal regulation strategy for the compression and expansion sections. It is found that system parameters fluctuate around a balance position with load fluctuation. But under the optimal operation, the fluctuation of the system efficiency and energy density is relatively small. System efficiency and energy density increase marginally with the decrease of ambient temperature, and thermal storage temperature increases linearly and markedly with rise in ambient temperature. We also found that system efficiency under constant pressure operation is decreased by 1.74 percent compared to that under sliding-pressure. This study will provide theoretical support for the design, operation, and control of TS-CAES systems.