Depiction of

Celebrating 40 years

Over the past four decades, we’ve grown in size, expanded across Europe and delved into new sectors. We’ve followed our passion for working together with experts in government, regulation, courts and business to find answers to global challenges.

From our roots in responding to privatisation in the 1980s to addressing today’s international challenge of climate change, our people are driven by the opportunity to make a difference and bring clarity to complex questions facing business and society.

Over this time economics has evolved, bringing new skills to answer new questions. It continues to help navigate evolving challenges in areas such as regulation, market investigations and public policy through the application of new approaches like data science and behavioural economics while bringing clarity to more recent global concerns such as climate change and regulating digital markets.

“We’re not celebrating 40 years of Oxera, we’re celebrating 40 years of people coming together to achieve a common vision. Be it with our colleagues or clients, the difference we make is only made possible by the people around us.”

Dr Luis Correia da Silva, Chair and Partner

Our academic curiosity provides unique insights into trending topics and complex questions, many of which are explored in Agenda. Read the top 40 articles from the last 40 years.

Celebrating 40 years 40 posts

Articles
Depiction of Which WACC when? A cost of capital puzzle (revisited)
12 minute read

Which WACC when? A cost of capital puzzle (revisited)

Real or nominal? Pre-tax or post-tax? (Or even vanilla?) The number of ‘flavours’ for calculating the weighted average cost of capital is sometimes bewildering. It is often assumed that they all reach more or less the same conclusion, but is this always the case? Contrary to common belief among practitioners, different styles of calculation have a material impact on the value of cash flow to investors. Read More

Articles
Depiction of Odds on? What was the probability of Leicester City’s 2016 success?
8 minute read

Odds on? What was the probability of Leicester City’s 2016 success?

What were the odds of Leicester City’s triumph in the 2015/16 English Premier League football season? Whether the club will be able to sustain its success will depend on its risk appetite, luck, the wage bill it will need to maintain and, perhaps most importantly, the impact of UEFA’s Financial Fair Play (FFP) rules on the competitive dynamics of club football. These issues are explored in the first of a series of Agenda articles on football, finance and economics Read More

Articles
Depiction of High time for hydrogen: establishing a hydrogen value chain in Europe (part 1)
7 minute read

High time for hydrogen: establishing a hydrogen value chain in Europe (part 1)

Across Europe and around the world, hydrogen is gaining traction as a low-carbon solution to our energy and transport needs. This is the first of two articles investigating the key strategic developments for hydrogen in the EU and the UK, and identifying the potential regulatory challenges that accommodating a hydrogen transition might entail. In this article, we introduce the hydrogen value chain and examine some upstream production issues. The second article will focus on the midstream (storage and transportation) and downstream (usage) elements of the value chain. Read More

Articles
Depiction of Mobile network-sharing agreements: opportunity or threat?
10 minute read

Mobile network-sharing agreements: opportunity or threat?

Mobile network-sharing agreements (NSAs) can support investment by relieving capital constraints, lowering the unit costs of expanding networks, and generating network cost savings that reduce both the scale of the investment and operating costs. However, concerns have been expressed about the anticompetitive effects of such cooperation between competitors. Given the importance of examining NSAs case by case, how can one assess their potential anticompetitive effects, and analyse and verify their benefits? Read More

Articles
Depiction of Unbundling: what’s the impact on equity research?
9 minute read

Unbundling: what’s the impact on equity research?

The EU’s second Markets in Financial Instruments Directive (MiFID II), introduced in January 2018, requires brokers to charge separate fees for trade execution and for research, thereby ‘unbundling’ them. Since these rules came into force, there have been concerns about their impact on the provision of research and, more generally, the development of capital markets. What market failures does the unbundling rule intend to address, and what are its potential unintended consequences? Read More

Articles
Depiction of Green derivatives? Trading for a low-carbon future
8 minute read

Green derivatives? Trading for a low-carbon future

Financial markets facilitate economic growth, which contributes to global prosperity and wellbeing. The political recognition that addressing climate change is also integral to these has seen financial markets adapt by providing a way to value the externality of pollution. Markets need reliable and liquid carbon and energy benchmarks to deliver an efficient transition from high- to low-carbon energy generation. Gordon Bennett, Managing Director of Utility Markets at ICE, considers the role of derivatives markets. Read More

Articles
Depiction of Home advantage? Who wins in multi-sided platform competition?
8 minute read

Home advantage? Who wins in multi-sided platform competition?

What do Google, Mastercard and Amazon have in common with early auction houses or the traditional village matchmaker? One answer is that they are all multi-sided platforms (MSPs). Much has been done in the last decade to try to understand the economics of such platforms. Yet current research is still uncovering new findings about pricing, multi-homing and the competitive dynamics of platforms—some of which can seem counterintuitive Read More

Articles
Depiction of RIIO-2 Final Determinations: how final?
11 minute read

RIIO-2 Final Determinations: how final?

Having published its Draft Determinations (DDs) in July 2020, on 8 December 2020, Ofgem published its Final Determinations (FDs) for the RIIO-2 price controls for the GB electricity transmission (ET), gas transmission (GT), and gas distribution (GD) sectors, and the electricity system operator (ESO). The price controls are due to start on 1 April 2021 and will run for five years, until 31 March 2026. Read More

Articles
Depiction of Valuing banks’ non-performing loans after COVID-19
10 minute read

Valuing banks’ non-performing loans after COVID-19

Due to the COVID-19 crisis, the European Central Bank (ECB) projects a sharp rise in non-performing loans (NPLs). In late 2020, the European Commission published an action plan for tackling NPLs, highlighting a potential need for banks to move NPLs off their balance sheets and into asset management companies (AMCs). Any transfer of NPLs to state-owned AMCs is likely to raise state aid issues—what are the key economic and financial questions that need to be considered here? Read More

Articles
Depiction of Crisis cartels: a COVID-19 side effect?
8 minute read

Crisis cartels: a COVID-19 side effect?

Over the years, crises have had a global impact on consumers and companies. The COVID-19 pandemic is no exception, with a number of companies being forced to close their doors for a prolonged period. National governments and competition authorities have shown increased willingness to allow companies to collaborate in order to combat the crisis. But what does economic theory suggest about the current COVID-19 crisis and its effect on the number of active cartels? Read More

Articles
Depiction of Two-sided market definition: some common misunderstandings
10 minute read

Two-sided market definition: some common misunderstandings

The European Commission is consulting on updating its 1997 Market Definition Notice, which provides important guidance on identifying relevant markets in competition cases. One hotly debated topic is defining markets for two-sided platforms. We discuss some common misunderstandings on this topic, including on how to apply the hypothetical monopolist test to digital platform markets Read More

Articles
Depiction of ‘Great’ British Railways?
3 minute read

‘Great’ British Railways?

On 20 May, the UK government published the Williams–Shapps Plan for Rail, which proposes the creation of a new rail body, ‘Great British Railways’. Katie-Lee English, Oxera Senior Consultant and former Head of Rail at HM Treasury, offers some initial thoughts on the proposals in the Report. At long… Read More

Articles
Depiction of CMA PR19 Final Determinations
13 minute read

CMA PR19 Final Determinations

On 17 March, the Competition and Markets Authority (CMA) published its summary of Final Determinations (FDs) of Ofwat’s PR19 price review for four disputing companies (Anglian Water, Bristol Water, Northumbrian Water and Yorkshire Water), following a reference from Ofwat at the request of each company. This article provides commentary… Read More

Articles
Depiction of Where next for RPI – X?
11 minute read

Where next for RPI – X?

With concerns around company outperformance and information asymmetries playing strongly on the minds of economic regulators, the UK regulatory model has moved on from the ‘fixed price’ paradigm of ‘RPI - X’. Regulators have looked to set more challenging price settlements, while also rebalancing risks within regulatory contracts to protect against windfalls. The model now resembles the rate-of-return approach it was intended to replace. Is this the right way forward? And what alternatives might there be? Read More

Articles
Depiction of The role of sustainability in merger control
5 minute read

The role of sustainability in merger control

The recent focus on sustainability in the context of coordination agreements and in state aid cases1 has now spread to merger control.2 This article addresses how sustainability fits into the merger assessment framework and what we can learn from environmental economics and the economics of climate change… Read More

Articles
Depiction of A formula for success: reviewing the social discount rate
12 minute read

A formula for success: reviewing the social discount rate

The social discount rate (SDR) is a crucial component of the UK government’s approach to project and policy appraisal. Government guidance has stipulated the same SDR (3.5%) since 2003. In the first of two Agenda in focus articles, we show that recent research can reasonably support an SDR of under 2.5%; and that this SDR declines considerably more slowly as the appraisal period is extended than the one that is currently used Read More

Articles
Depiction of New game, new rules: the draft guidelines for ‘green’ state aid measures
8 minute read

New game, new rules: the draft guidelines for ‘green’ state aid measures

On 7 June, the European Commission published its draft climate, energy and environmental aid guidelines (CEEAG). More comprehensive than the previous version, these guidelines cover new technologies (such as hydrogen) and state aid for the phasing out of coal. We explore the role of economic and financial analysis in assessing the compatibility of ‘green’ aid measures under the guidelines. Read More

Articles
Depiction of When to give the green light to green agreements
16 minute read

When to give the green light to green agreements

Should companies be allowed to cooperate—or ‘collude’—on socially beneficial environmental behaviour? Do companies even have the incentive to cooperate on socially beneficial behaviour? In this article, we reconcile apparently divergent views concerning the law and economics of the value of sustainability agreements, by illustrating how the presence of sustainability spillovers between firms can generate both socially and privately beneficial cooperation. Read More

Articles
Depiction of Package deal: why the Airtours criteria are also relevant for understanding cartels
10 minute read

Package deal: why the Airtours criteria are also relevant for understanding cartels

fundamental economic theory concerning coordination between competing firms, they are relevant for understanding any form of collusion—including, for instance, in the context of cartel damages litigation. Read More

Articles
Depiction of Catchment if you can: a practical guide to local competition analysis
10 minute read

Catchment if you can: a practical guide to local competition analysis

Many markets involve local or regional competition between firms. Retailers, hospitals, airports, and even funeral directors compete for their customers locally. Empirical techniques for analysing competition in local markets have developed and become more sophisticated over time. But which techniques provide the most accurate assessment? We discuss and compare a range of practical methods that have been used in recent competition cases Read More

Articles
Depiction of RIIO-2 appeals—CMA provisional findings
8 minute read

RIIO-2 appeals—CMA provisional findings

The Competition and Markets Authority (CMA) has published a summary of its Provisional Determination of the appeals in respect of Ofgem’s RIIO-GD2 and RIIO-T2 price control review. Out of 12 grounds of appeal, it provisionally upheld, partially or fully, five. In many instances, the CMA did not find Ofgem’s… Read More

Articles
Depiction of Non-fungible. Non-tangible. Still valuable?
10 minute read

Non-fungible. Non-tangible. Still valuable?

Non-fungible tokens (NFTs) are blockchain-based ownership certificates of all kinds of digital collectables—ranging from pixelated cats to canonical YouTube videos and even recordings of unique moments in sport. The market for NFTs has skyrocketed. But what are they exactly? And what is driving their value? With the help of Oxer-cat, the first Oxera NFT, we aim to answer these questions, and provide an overview of possible challenges and future developments for NFTs. Read More

Articles
Depiction of Tipping: should regulators intervene before or after? A policy dilemma
11 minute read

Tipping: should regulators intervene before or after? A policy dilemma

In digital markets, platforms often reach a tipping point. When network effects are sufficiently strong, users are drawn towards the network with the highest number of other users, making it more attractive, until the market eventually tips in its favour. While there are benefits to market tipping, concerns regarding abuse of dominance may also arise, which, as discussed in this article, can present a dilemma for policymakers. Read More

Articles
Depiction of Conglomerate mergers: are theory and practice aligned?
14 minute read

Conglomerate mergers: are theory and practice aligned?

Recent European Commission merger control practice suggests a renewed willingness to scrutinise conglomerate mergers. This is in stark contrast to the Commission’s past practice and to the US approach. In this article, we detail exactly how conglomerate mergers generate customer benefits, but also—under certain circumstances—how they may end up harming competition and consumers. We apply theory to practice by discussing the recent NVIDIA/Mellanox merger, and explore which novel theories the Commission may pursue in the future. Read More

Articles
Depiction of Shining the light: the merits of on- vs off-exchange trading
8 minute read

Shining the light: the merits of on- vs off-exchange trading

Many financial assets trade away from exchanges in over-the-counter (OTC) markets. The academic literature has highlighted the value of both the OTC and exchange trading models but also notes some inefficiencies of the OTC model from an overall market design perspective. Getting the right balance between OTC and exchange… Read More

Articles
Depiction of International travel in a pandemic: what does UK data tell us?
9 minute read

International travel in a pandemic: what does UK data tell us?

Travel restrictions, as well as testing and quarantine requirements, have stifled international travel during the COVID-19 pandemic. The UK government’s traffic light system, which was originally welcomed by many, has led to confusion and frustration in the industry and among passengers. The UK government has recently published more detail… Read More

Articles
Depiction of The economics of climate change: a signal in the noise
20 minute read

The economics of climate change: a signal in the noise

With many countries around the world signing up to targets of net zero carbon emissions, what is the role of economics in the climate change debate? Economics can help to support the pathway to decarbonisation in four key areas, but it is important to communicate economic recommendations effectively to… Read More

Articles
Depiction of Intel and the AEC test: ‘Do. Or do not. There is no try.’
8 minute read

Intel and the AEC test: ‘Do. Or do not. There is no try.’

After more than two decades, the Intel saga may have finally ended with the General Court’s judgment of 26 January 2022. The judgment—which had at its core the use of the ‘as-efficient competitor’ test in the context of loyalty rebates―confirms the critical role of robust economic analysis in abuse of dominance cases. We reflect on the implications going forward. Read More

Articles
Depiction of Creating a market for negative emissions
6 minute read

Creating a market for negative emissions

As the curtain dropped on last year’s COP26 summit, many were heartened by the agreements made. Yet more needs to be done to fast-track the roll-out of negative emissions technologies that will be vital in addressing irreversible global damage from carbon emissions. Oxera research for Drax found a range of market design mechanisms through which these technologies could figure in the UK’s Emissions Trading Scheme. Angela Hepworth, Innovation Commercial Director at Drax Group, looks at the role of negative emissions technologies in reaching net zero targets. Read More

Articles
Depiction of Gender on the agenda: improving inclusivity in competition analysis
11 minute read

Gender on the agenda: improving inclusivity in competition analysis

The Organisation for Economic Co-operation and Development (OECD) has launched an initiative to explore whether applying a gender ‘lens’ can help deliver more effective competition policy. As surveys are often used to help define markets and assess the impact of mergers, the OECD asked Oxera to assess gender differences in surveys carried out in past competition cases. What differences does our study find, and does gender matter in competition policy? Read More

Articles
Depiction of They think it’s all over… Economic dynamics behind the European Super League
5 minute read

They think it’s all over… Economic dynamics behind the European Super League

The announcement of the European Super League (and the subsequent climbdown) has attracted attention across the globe. As discussed in this article, the Super League forms part of a wider narrative of changing football audiences and the difficult decisions that clubs face when monetising them. The announcement that 12… Read More

Articles
Depiction of Bits of advice: the true colours of dark patterns
13 minute read

Bits of advice: the true colours of dark patterns

Dark patterns are deceptive online interface designs that are used to trick people into making decisions that are in the interests of the online business, but at the expense of the user. In this second article of our ‘bits of advice’ series on digital regulation, we dive into the economics behind dark patterns: what are they; what can economics teach us about how they work; how is digitalisation changing their costs and benefits in the eyes of businesses; and how can competition and consumer protection authorities respond? Read More

Articles
Depiction of App’y hour—German energy law put to test
9 minute read

App’y hour—German energy law put to test

In a ruling due this September, the European Court of Justice (ECJ) is expected to grant the German energy regulator, the Bundesnetzagentur, greater powers and independence in its decision-making—but what will this mean for German energy networks? In this article, we will review key elements of the Bundesnetzagentur’s efficiency… Read More

Articles
Depiction of Third country, second thoughts? The EU’s foreign subsidies regulation
10 minute read

Third country, second thoughts? The EU’s foreign subsidies regulation

The European Parliament and the Council are currently debating the European Commission’s proposed regulation on foreign subsidies, which covers subsidies granted by third countries that have the potential to distort competition in the EU. In particular, the proposed regulation targets large M&A deals and public procurement procedures involving financial… Read More

Articles
Depiction of Different plans, common challenges: national recovery and resilience plans in the EU
7 minute read

Different plans, common challenges: national recovery and resilience plans in the EU

Through their national recovery and resilience plans, EU member states have allocated funding to renewables, hydrogen fuel, energy networks, and innovation in the context of energy supply. While the largest countries are taking different approaches to funding, the approval and implementation phase set out by the EU’s Recovery and… Read More

Articles
Depiction of Causality and natural experiments: the 2021 Nobel Prize in Economic Sciences
8 minute read

Causality and natural experiments: the 2021 Nobel Prize in Economic Sciences

The Royal Swedish Academy of Sciences awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2021 to three economists—Joshua Angrist, David Card, and Guido Imbens. Their contributions to the economics literature shaped economists’ understanding of when causal relationships can be established, especially using non-experimental data, and what kinds of methods and assumptions allow us to uncover the true causal effect of one variable on another. Today, businesses, courts and policymakers rely on causal empirical evidence to make their decisions. Read More

Articles
Depiction of Ofwat and future price reviews: a stake in the ground
10 minute read

Ofwat and future price reviews: a stake in the ground

In May 2021, Ofwat, the economic regulator of the water industry in England and Wales, set out its vision for the next price review (PR24). Key themes are long-term planning, resilience, how cost assessment is undertaken, eliciting customer preferences, outcome incentives, capital structure, and financial resilience. Ofwat has put a stake in the ground. What are the key issues, and what risks do the proposals pose for the sector? Read More

Articles
Depiction of Promoting the green transition: the EU’s Recovery and Resilience Facility
11 minute read

Promoting the green transition: the EU’s Recovery and Resilience Facility

Over the next five years, significant funding will be made available through the EU’s Recovery and Resilience Facility (RRF) to support member states’ recovery from the COVID-19 crisis. A large part of this funding will be allocated to the ‘green transition’, supporting the EU’s goal to reach net-zero emissions by 2050. We take a look at some of the investments, and the role of economic and financial analysis in ensuring that they are in line with state aid rules. Read More

Articles
Depiction of Meaningful purpose in business
9 minute read

Meaningful purpose in business

What is the purpose of a business? Recent years have seen growing social, political and market pressures on business leaders worldwide to go beyond simply creating short-term value for shareholders. Utilitalia—the federation of Italian water, energy, and municipal waste companies—asked Oxera to explore how a wider purpose can be embedded within an organisation, and how performance could be monitored. Read More

Articles
Depiction of RIIO-2 appeals: CMA Final Determination
9 minute read

RIIO-2 appeals: CMA Final Determination

The Competition and Markets Authority (CMA) has published its Final Determination (FD) of the appeals in respect of Ofgem’s RIIO-GD2 and RIIO-T2 (‘RIIO-2’) price control reviews. Out of 12 grounds of appeal, it upheld five (partially or fully). In several areas, the CMA afforded Ofgem a ‘margin of appreciation’, whereby the CMA ruled that Ofgem did not make an error, even in areas where the CMA might have acted differently. The CMA’s RIIO‑2 decision provides valuable insights into the evidence required by companies and regulators to get decisions overturned or upheld in future appeals. Read More