We study the investment incentives of a regulated, incumbent firm in a deregulation process. The regulator cannot commit to a long-term regulatory policy, and investment decisions are taken before optimal regulatory policies are imposed. We characterize the regulated incumbent's incentive to invest when a deregulation process is initiated and an unregulated firm enters the market as a result.
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Paper provided by Boston University - Industry Studies Programme in its series Papers with number
67.
Find related papers by JEL classification: D20 - Microeconomics - - Production and Organizations - - - General D21 - Microeconomics - - Production and Organizations - - - Firm Behavior L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
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