Prof. W.H. Boshoff
The declaration of a state of national disaster in South Africa, due to the Covid-19 pandemic, was followed by pricing regulations pertaining to the pricing and supply of certain consumer and medical products and services. The regulations raise several questions that relate to the economic analysis of excessive pricing and its accompanying competition policy. What is the benchmark against which a price is to be compared in order to infer its excessiveness – that is, what is an appropriate test for excessive pricing? What are the empirical tools required for an assessment of excessive pricing? During Covid-19 disaster period, how would the test and empirical tools differ? More fundamentally, why do we expect excessive pricing to be more likely during this period – that is, how may the disaster period affect market power and its abuse? This paper studies these questions, focusing on the economic and legal basis for a retrospective benchmark, specifically when responding to a demand surge is considered the basis of market power abuse. International experience and the associated economics literature support a retrospective benchmark as preferable to other benchmarks, including cost-based benchmarks, when a structural shift is available to delineate competitive and less competitive periods. The paper distinguishes price-gouging and excessive-pricing benchmarks, and situates the South African excessive-pricing benchmark during the Covid-19 regulations between these benchmarks. It also evaluates the relevant duration of the benchmark period. The analysis relies on econometric terminology to elucidate important principles, which apply equally to (most) cases where sophisticated econometric analysis is not possible.

Paul W.J. de Bijl and Helanya Fourie
This paper explores the relationship between local public ownership and the sustainability mission of companies in the energy transition. Public ownership may matter due to “contractual incompleteness” where legislation and regulation fall short in dealing with market failures or addressing public interests. Ownership provides a measure of influence and control over the mission and strategy of a company, which is important in light of the unanticipated consequences of the energy transition. The role of municipal ownership is underlined by the growing popularity of district heating and cooling systems and the impact of the energy transition on the urban environment.

Willem Boshoff & Rossouw van Jaarsveld
Collusion is often a recurrent phenomenon, with cartel periods interspersed by periods of greater competition. In developing countries in particular, industries with a history of legal collusion are often characterized by recurrent collusion. Canonical models implicitly treat collusion as recurrent by modelling collusion as a state dependent outcome, often based on an unobserved demand state. Yet empirical studies have paid less attention to recurrent collusion. This paper proposes a Markov regime-switching (RS) model to detect recurrent periods of collusive damages and to estimate price overcharge in these cases. An empirical model of recurrent collusion must satisfy three properties. Firstly, it should account for dierent datagenerating processes during collusive and non-collusive episodes. Secondly, it should be able to detect the dates and duration of collusive and non-collusive episodes. Thirdly, it should account for  exible transitions between collusive and non-collusive episodes. We argue that the RS model meets these requirements. We demonstrate these features in an application to the South African cement market, which, similar to cement markets in a number of other countries, have experienced recurrent collusion. Our results suggest that the exclusion of non-collusive periods { including price wars { yield higher overcharge estimates than conventional approaches. In competition policy, the RS model can act as a screening tool, to identify recurrent collusive behaviour. Courts may also nd the RS model useful when estimating collusive damages, especially in private litigation, where the court must also determine the period of liability.