Bertrand Competition with an Asymmetric No-discrimination Constraint. Bruges European Economic Research (BEER) 23/June 2012

Regulators and competition authorities often prevent firms with significant market power or dominant firms from practicing price discrimination. The goal of such an asymmetric no- discrimination constraint is to encourage entry and serve consumers’ interests. This constraint prohibits the firm with significant market power to practice both behaviour-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We find that this constraint hinders entry and reduces welfare when the monopolistic segment is small.

Reviewing the EU ETS review? Report of the CEPS TAsk Force on "Does the ETS market produce the 'right' price signal"? CEPS Task Force Report, 12 November 2012

Drawing on discussions within a CEPS Task Force on the revised EU emissions trading system, this report provides a comprehensive assessment of the pros and cons of the various measures put forward by different stakeholders to address the level and stability of the price of carbon in the EU. It argues that the European Commission, the member states, the European Parliament and other stakeholders need to give serious consideration to introducing some kind of ‘dynamic’ adjustment provision to address the relatively inelastic supply. The report also suggests that there is a need to improve communication of market-sensitive information, for example by leaving the management of the ETS to a specialised body.