Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Effect of Monopoly Regulation on the Timing of Investment

Contents:

Author Info

  • Jörg Borrmann
  • Gert Brunekreeft

Abstract

This paper contributes a theoretical analysis of the effects of different types of regulation on the timing of monopoly investment in a setting with lumpy investment outlays. Concentrating on the case where investment increases the regulatory asset base, we distinguish between price-based regulation and cost-based regulation. Under cost-based regulation, investment triggers a change of regulated prices, whereas, under price-based regulation, investment does not affect them. To motivate investment, we focus on wear and tear leading to replacement investment and on demand growth resulting in expansion investment. Our main conclusion is that cost-based regulation accelerates investment compared to price-based regulation.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.bremer-energie-institut.de/download/bewp/bewp09.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Bremer Energie Institut in its series Bremen Energy Working Papers with number 0009.

as in new window
Length: 23 pages
Date of creation: May 2011
Date of revision:
Handle: RePEc:bei:00bewp:0009

Contact details of provider:
Web page: http://www.bremer-energie-institut.de/

Related research

Keywords: Cost-based regulation; Expansion investment; Investment timing; Monopoly; Price-based regulation; Replacement investment;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ingo Vogelsang, 2010. "Incentive Regulation, Investments and Technological Change," CESifo Working Paper Series 2964, CESifo Group Munich.
  2. Gert Brunekreeft, 2012. "On the role of international benchmarking of electricity Transmission System Operators facing significant investment requirements," Bremen Energy Working Papers, Bremer Energie Institut 0012, Bremer Energie Institut.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bei:00bewp:0009. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christine Brandstätt).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.