The investment effects of price caps under imperfect competition: A note
AbstractWe examine the impact of price cap regulation on the capacity investments of oligopolistic suppliers facing time-varying demand. We find that binding price caps set above long-run marginal cost increase (rather than decrease) aggregate capacity investment.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 106 (2010)
Issue (Month): 2 (February)
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Web page: http://www.elsevier.com/locate/ecolet
Capacity Investment Cournot competition Price cap;
Other versions of this item:
- Stefan Bühler & Anton Burger & Robert Ferstl, 2008. "The Investment Effects of Price Caps under Imperfect Competition: A Note," University of St. Gallen Department of Economics working paper series 2008 2008-17, Department of Economics, University of St. Gallen.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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