Regulation and Management of Innovative Technologies

Siddharth Singh
2019
Advances in technology have implications for the way businesses are regulated and managed. This dissertation examines three issues that have arisen in response to recent technological innovations. The first chapter studies the regulation of electricity markets with rooftop solar, a technology that has recently seen a sharp increase in adoption. Innovative internet-based technologies have givenfirms and customers the ability to harness more information in their decision-making. The second and
more » ... rd chapters of this dissertation study how this increased information availability affects firm-level decisions, and how additional information can be used as a strategic lever to compensatefor capacity shortage. The first chapter is motivated by the dramatic increase in the adoption of rooftop solar systems,driven in large part by cost reductions caused by technological advances in solar panel design. This has implications for regulators, who seek to induce an optimal level of rooftop solar adoption, trading off between its environmental benefits and the financial burden that it imposes, while simultaneously safeguarding the interests of utility companies, solar system installers, and customers.We formulate and analyze a social welfare maximization problem for the regulator, focusing on how the choice of tariff structure (that governs how customers pay the utility for their usage) interacts with its competing objectives. We uncover the structural properties of a successful tariff, findingthat the tariff structures used in most states in the US are inadequate: to achieve welfare-optimal outcomes, a tariff must be able to discriminate among customer usage tiers and between customers with and without rooftop solar. We present a tariff structure with these two characteristics andshow how it can be implemented as a simple buy-all, sell-all tariff while retaining its favorable properties. We illustrate our findings numerically using household-level data from Nevada and New Mexico. The second chapter is m [...]
doi:10.1184/r1/9589412.v1 fatcat:wwk36aewojedbo7xrunhrwhbgq