he European Parliament under the current cooperation procedure has an important power: it can make proposals that, if accepted by the Commission of the European Communities, are easier for the Council of Ministers to accept than to modify, since only qualified majority is required for acceptance, whereas full unanimity for modification. The importance of this power, which I call the power of the conditional agenda setter, has not been recognized in previous scholarly work. For structural reasons explained in the text, this power is likely to increase in the future. I conclude by arguing that the conditional delegation of power to international actors (the European Parliament, Commission, and the Court of Justice) is a frequent phenomenon in European institutions. This delegation presents three important advantages: it makes possible the selection of one among many possible equilibria, it accelerates European integration, and it diffuses responsibility for politically unpopular measures. T he European Parliament (EP) is widely considered a weak parliament (Dehouse 1989; Edward 1987; Fitzmaurice 1988; Lenaerts 1991; Lodge 1989; Wessels 1991). Moreover, discussions are frequently advanced about the "democratic deficit" of European institutions, which, among other things implies a weakness of the EP (Bogdanor 1989; Bowler and Farrell 1993; Thomas 1988; Williams 1991). Yet in 1989, the EP, when confronted with the common position of the Council of Ministers specifying low standards on exhaust emissions for small cars, raised the standards and was able to impose its decision on both the Commission of the European Communities and a "reluctant majority" in the Council of Ministers (Jacobs and Corbett 1990, 170). According to the cooperation procedure established by the Single European Act treaty, the Council of Ministers can modify the position of the Parliament by a unanimous vote, but in this case the Council could not agree on any alternative. The legislation in question is far from trivial, since it affects around 60% of all passenger cars in the European Community (Kim 1992). Moreover, the differences in positions between the EP and the Council were significant: compared to the Council's position, the legislation adopted raised the price of small cars by more than five hundred dollars apiece and significantly improved the environment. I shall explain this surprising power of the EP. I argue that under the current cooperation procedure, the EP has an important power: it can make proposals that, if accepted by the Commission, are easier for the Council of Ministers to accept than to modify (only qualified majority being required for acceptance but unanimity, for modification). I call this the power of the conditional agenda setter and study its properties. My answer generates a second question: If the EP is able to influence the legislative process so significantly, why does it not do so all the time? Alternatively, if the conditional agenda-setting power is significant, the EP should have been recognized in the literature as a strong parliament. To address these issues, I shall specify the conditions under which the EP can make use of its agenda-setting power. The European Community fascinates observers and scholars because it is a unique object of study. Accordingly, a series of neologisms have been invented to describe it. It is "neither a state nor an international organization" (Sbragia 1992, 257); "less than a Federation, more than a Regime" (W. Wallace

/pdf/the-power-of-the-european-parliament-as-a-conditional-agenda-1t9rrgyk5n.pdf

The power of the European Parliament as a conditional agenda setter

Economists' traditional hostility to rent contols is based on models that treat the housing market as perfectly competitive and on the experience with 'hard' controls in New York City and many European countries following World War II. The current 'soft' rent control systems in North America are varied and qualitatively different from earlier hard controls. The theoretical case against them is weak, particularly when the housing market is viewed as imperfectly competitive. The empirical case against them is weak, too. Economists should reconsider their blanket opposition to current rent control systems and evaluate them on a case-by-case basis.

https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.9.1.99

Time for Revisionism on Rent Control

4. Summary As we indicated at the beginning of this chapter, price discrimination is a ubiquitous phenomenon. Nearly all firms with market power attempt to engage in some type of price discrimination. Thus, the analysis of the forms that price discrimination can take and the effects of price discrimination on economic welfare are a very important aspect of the study of industrial organization. In this survey we have seen some of the insights offered by the economic theory of price discrimination. However, much work remains to be done. For example, the study of marketing behavior at the retail level is still in its infancy. Retail firms use a variety of marketing devices — sales, coupons, matching offers, price promotions, and so on — that apparently enhance sales. The marketing literature has examined individual firm choices of such promotional tools. But what is the ultimate effect of such promotions on the structure and performance of market equilibrium? What kinds of marketing devices serve to enhance economic welfare and what kinds represent deadweight loss? One particularly interesting set of questions in this area that has received little attention concerns the computational costs involved in using complex forms of price discrimination. In the post-deregulation airline industry of the United States, airlines have taken to using very involved pricing schemes. Finding the most inexpensive feasible fight may involve a considerable expenditure of time and effort. What are the welfare consequences of this sort of price discrimination? Do firms appropriately take into account the computational externality imposed on their customers? Even in more prosaic case of public utilities, pricing schedules have become so complex that households often make the “wrong” choice of telephone service or electricity use. Questions of simplicity and ease-of-use have not hitherto played a role in the positive and normative analysis of price discrimination. Perhaps this will serve as a fruitful area of investigation in future studies of price discrimination.

Chapter 10 Price discrimination

It is now well established in both the economic and legal literature that successful price co-ordination (either express or tacit) is not inevitable — even in highly concentrated industries protected by insurmountable barriers to entry. The key to this insight is the recognition that even though oligopolists’ fates are interdependent, individual self-interests are not perfectly consonant. As a result, oligopolists may find it difficult to agree on a mutually acceptable co-operative outcome, achieve that outcome smoothly, and maintain it over time in the face of exogenous shocks and private incentives to deviate. In the current language of industrial organisation, the joint profit-maximising point may not be a Nash equilibrium.

Practices that (Credibly) Facilitate Oligopoly Co-ordination

Coallitions and Power: Effects of Qualified Majority Voting in the Council of the European Union

The equivalence of core and cost share equilibria in an economy with a public good

Issue Linkage in the European Community

Contract equilibria in a regulated rental housing market

Burden Sharing in NATO: an Economic Analysis

The Single European Act (SEA), which came into effect on July 1, 1987, is the first major systematic revision of the European Community (EC) Treaties. It concretizes the EC inherent federal principles and, in certain crucial respects, changes the institutional balance by opening new opportunities for the European Parliament (EP) in the decision-making process. The amendments made to the Rome Treaty were designed to facilitate creation of internal European market by 1992. To ensure a smooth entry into 1992, which is a primary goal of the EC, these amendments were coupled with provisions allowing the implementation of the new decision-making process, so-called cooperation procedure.

Hans Wiesmeth

Papers

The equivalence of core and cost share equilibria in an economy with a public good

Issue Linkage in the European Community

Contract equilibria in a regulated rental housing market

Burden Sharing in NATO: an Economic Analysis

An Economic Analysis of Cooperation in the European Community