Partial Regulation and cost allocation in multimarket utilities
AbstractThis paper derives optimal regulatory schemes for partially regulated multimarket utilities, both in a context of complete and asymmetric information. The effects of this optimal price structure regulation on competition in the unregulated segment are explored in a context of Cournot and Bertrand oligopoly. It is shown that although Fully Distributed Cost (FDC) can be a good instrument in a partial regulation context with full information, it offers under asymmetric information an opportunity for the multimarket incumbent to engage in strategic accounting manipulation by misreporting true marginal costs : costs are inflated in the regulated segment and competition is harmed in the unregulated segment. The incremental cost rule is thus compared to the FDC one in terms of overall welfare effects, based on the characteristics of this incentive behavior. Accounting manipulation is also studied within Competition Policy issues, where the anti-competivite effects of possible regulatory failure are highlighted. ...French Abstract : Ce papier présente une analyse normative de la régulation partielle, oû des mécanismes de régulations optimaux dans des entreprises multi marchés horizontalement intégrées et partiellement régulées sont étudiés. On montre que l'allocation des coûts est un instrument efficace pour le régulateur, en comparant la politique des Coûts Totalement Distribués (Fully Distributed Cost FDC) à celle du Coût Incrémental (Incremental Cost IC). La manipulation stratégique comptable est aussi exposée, lorsque certains coûts ne sont pas observés avec certitude ; et l'effet des mécanismes de régulation sur le marché non régulé est mis en évidence. On montre en particuliers comment des politiques de régulation myopes peuvent avoir des effets anti-concurrentiels. L'interaction entre Régulation Partielle et Politique de la Concurrence est mis en évidence par un cas d'étude dans le secteur postal en Allemagne : UPS vs. Deutsche Post AG
Download InfoIf 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.
Bibliographic InfoPaper provided by French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse) in its series Economics Working Paper Archive (Toulouse) with number 54.
Length: 38 p.
Date of creation: 2004
Date of revision:
Postal: INRA ESR - BP27 - 31326 Castanet Tolosan cedex - France
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L4 - Industrial Organization - - Antitrust Issues and Policies
- L5 - Industrial Organization - - Regulation and Industrial Policy
- M4 - Business Administration and Business Economics; Marketing; Accounting - - Accounting
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Carlo Scarpa & Giacomo Calzolari, 2009. "On Regulation and Competition: Pros and Cons of a Diversified Monopolist," Working Papers 2009.55, Fondazione Eni Enrico Mattei.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RAYNAL Helene).
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.