Jean-Christophe Poudou

Universal service obligations: The role of subsidization schemes

This paper (i) highlights the role that unit subsidies can play in the compensation scheme of a Universal Service Obligation (USO), and (ii) shows that welfare may be reduced when regulation requires accounting separation of network activities for vertically integrated USO providers. This suggests that accounting separation should be avoided when a USO is implemented.

Reforming the Postal Universal Service

Abstract The postal sector has undergone dramatic changes over the recent years under the double effect of ongoing liberalization and increased competition with alternative communication channels (e-substitution). As a result, the mail volume handled by the historical operator has declined sharply while the latter’s ability to match the same standard of universal service may be under threat. Thus, a reform of the postal universal service is on the agenda. This paper examines possible reforming options ranging from keeping universal service within the postal sector to redefining universal service as spanning postal and electronic technologies.

North/South Contractual Design Through the REDD+ Scheme

Climate change is a worldwide issue that needs to be tackled. One of the primary source of carbon emissions is deforestation and forest degradation responsible of anthropogenic GHG emissions in a range of 12% (Van der Werf et al. (2009)) to 15-20% (IPCC (2007a, 2007b)). To deal with the deforestation and forest degradation issue, the international community has been promoting the Reducing Emissions from Deforestation and Forest Degradation + (REDD+) scheme to design the post-Kyoto architecture. There is currently an ongoing debate with regards to the REDD+ scheme ∗This paper is distributed for purposes of comment and discussion only. Please do not circulate or cite without the author’s permission. †Paris School of Economics (PSE) Universite Paris 1 Pantheon-Sorbonne, Centre d’Economie de la Sorbonne, 106-112 Bd de l’Hopital, 75647 Paris Cedex 13, France, Tel: +33 1 44 07 82 24, E-mail: Mireille.Chiroleu-Assouline@univ-paris1.fr ‡Universite Montpellier 1, UMR5474 LAMETA, F-34000 Montpellier, France. Tel: +33 4 34 43 25 06. E-mail: jean-christophe.poudou@univ-montp1.fr §Universite Montpellier 3 Paul Valery & Universite Montpellier 1, UMR5474 LAMETA, F-34000 Montpellier, France. Tel: +33 4 34 43 25 49. E-mail: roussel@lameta.univ-montp1.fr

Universal Service Obligations and Competition with Asymmetric Information

A regulator imposes a universal service obligation (USO) on a vertically integrated firm that owns an essential network. The regulator has imperfect information about the networks fixed cost. Network access is provided to licensed competitors. The USO consists in a constraint on market coverage and is compensated through a mix of public funds and transfers from entrants. We first use a basic adverse selection model to show that, because of informational rents, a sufficiently high shadow cost of public funds can lead to a lower coverage with the USO than without it. We then show that this result tends to be robust in various realistic extensions of the basic model.

Natural Gas Storage and Market Power

Within the context of an evolving global market for natural gas and restructuring efforts in the European market, gas storage is an important element. Providing additional flexibility, promoting competition, and enhancing supply security are crucial factors for natural gas sector liberalization. Storage in Europe has come to the center of the energy policy debate mainly due to very cold temperatures in winter 2005/06 and gas price increases during that time period. This book covers four main topics: development of commercial storage; access regulation; capacity allocation and market power; storage and security of gas supply. Each Chapter puts forth an innovative analytical model discussed or applied to realistically explain specific issues in one of the four biggest European gas consuming countries (France, Germany, Italy and the UK).

Contracting and the Disclosure of Ideas in the Innovation Process

We analyze contracting between an innovator endowed with an idea and a project developer. The innovator has private information about the value of his idea, whereas the developer must exert some non-verifiable effort at the development stage. The developer may also threaten to leave the relationship after being informed on the value of the idea. The equilibrium contracts distort downwards the developers incentives, but differently so depending on the strength of intellectual property rights (IPR). In particular, with intermediate IPR, only pooling contracts arise, with a limited amount of information being revealed at equilibrium.