Arbeitspapier
Why Germany's "Gas Price Brake" Encourages Moral Hazard and Raises Gas Prices
To help German households and firms with exploding energy costs, the German government is about to implement a new transfer scheme called "gas price brake." A unique feature of this energy price relief measure is that both households and the industry receive a transfer that increases in one's actual gas price. In a formal model, we show that such a transfer scheme creates incentives for moral hazard of gas providers to raise gas prices. We also show that competition does not help to overcome this adverse effect of the gas price brake. An equivalent critique applies to the electricity price brake that is to be implemented at the same time as the gas price brake.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 10163
- Classification
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Wirtschaft
Microeconomic Policy: Formulation, Implementation, and Evaluation
Monopoly; Monopolization Strategies
Energy: Government Policy
International Law
- Subject
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energy prices
energy policy
consumer protection policy
gas price brake
- Event
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Geistige Schöpfung
- (who)
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Dertwinkel-Kalt, Markus
Wey, Christian
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2022
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Dertwinkel-Kalt, Markus
- Wey, Christian
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2022
Other Objects (12)
Why Germany's Gas Price Brake Encourages Moral Hazard and Raises Gas Prices
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Neue Mindestlohngesetze vernichten Gewerkschaftskonkurrenz: Kommentar
Why Germany's Gas Price Brake Encourages Moral Hazard and Raises Gas Prices
Why "energy price brakes" encourage moral hazard, raise energy prices, and reinforce energy savings
Resale price maintenance in a successive monopoly model
Multi-Product Pricing and Minimum Resale Price Maintenance
Third-degree price discrimination in oligopoly when markets are covered
Third‐Degree Price Discrimination in Oligopoly when Markets are Covered
Third-Degree Price Discrimination in Oligopoly When Markets Are Covered
Die Bedeutung gesamtwirtschaftlicher Produktivitätsfortschritte im Rahmen der Price Cap Regulierung
Third-Degree Price Discrimination in Oligopoly When Markets Are Covered
Input price discrimination (bans), entry and welfare
The Nash bargaining solution in vertical relations with linear input prices
Neue Mindestlohngesetze vernichten Gewerkschaftskonkurrenz: Kommentar
Why Germany's Gas Price Brake Encourages Moral Hazard and Raises Gas Prices
Why "energy price brakes" encourage moral hazard, raise energy prices, and reinforce energy savings
Resale price maintenance in a successive monopoly model
Multi-Product Pricing and Minimum Resale Price Maintenance
Third-degree price discrimination in oligopoly when markets are covered
Third‐Degree Price Discrimination in Oligopoly when Markets are Covered
Third-Degree Price Discrimination in Oligopoly When Markets Are Covered
Die Bedeutung gesamtwirtschaftlicher Produktivitätsfortschritte im Rahmen der Price Cap Regulierung
Third-Degree Price Discrimination in Oligopoly When Markets Are Covered
Input price discrimination (bans), entry and welfare
The Nash bargaining solution in vertical relations with linear input prices