Good Regulatory Regimes
Assuming simple functional forms, numerical methods are used to analyze linear regulatory rules that include cost-plus and price-cap regimes. Regulators are assumed to observe actual cost, but not the disutility of cost reduction, and are assumed unable to impose taxes or make transfers. Best linear regimes depend importantly on the level and form of uncertainty, the regulatory objective function, and the firm profitability constraint. Under uncertainty, regimes in which price depends in part on actual cost generally substantially outperform pure price caps, particularly in terms of consumers' surplus.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 20 (1989)
Issue (Month): 3 (Autumn)
|Contact details of provider:|| Web page: http://www.rje.org|
|Order Information:||Web: https://editorialexpress.com/cgi-bin/rje_online.cgi|
When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:20:y:1989:i:autumn:p:417-436. 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: ()
If references are entirely missing, you can add them using this form.