The politics of requesting: Strategic behavior and public utility regulation
Extant models of public utility regulation assume that regulated firms make the same rate adjustment requests regardless of the political environment they will face during the rate case. Focusing on information asymmetries, the repeated interaction between the firm and the regulatory commission, and behavioral assumptions about the goals of regulators, a new model is proposed that assumes firms strategically and rationally plan their requests to respond to political and agency, as well as standard economic factors. An implication of the new model is that the effect of political factors, such as grassroots advocacy and regulator election, should be observed in request equations rather than in award equations where they are traditionally sought. This new model is tested using data from 54 telephone rate cases. The results indicate that firms do respond strategically to political factors (especially to regulator elections), and also to agency factors (such as workload), by increasing their requests. This partially explains a puzzling result in the literature and has implications for regulatory policy, interest group behavior, democratic institutions, and public management.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 15 (1996)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/journal/34787/home|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William T. Gormley, 1987. "Institutional policy analysis: A critical review," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 6(2), pages 153-169.
- Robert S. Chirinko & Edward P. Harper, Jr., 1992.
"Buckle-Up or Slow-Down? New Estimates of Offsetting Behavior and Their Implications for Automobile Safety Regulation,"
9207, Harris School of Public Policy Studies, University of Chicago.
- Robert S. Chirinko & Edward P. Harper, 1993. "Buckle up or slow down? New estimates of offsetting behavior and their implications for automobile safety regulation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 270-296.
- Robert L. Hagerman & Brian T. Ratchford, 1978. "Some Determinants of Allowed Rates of Return on Equity to Electric Utilities," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 46-55, Spring.
- Steven Kelman, 1992. "Adversary and cooperationist institutions for conflict resolution in public policymaking," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(2), pages 178-206.
- Walter Primeaux & Patrick Mann, 1985. "Voter power and electricity prices," Public Choice, Springer, vol. 47(3), pages 519-525, January.
- Paul L. Joskow, 1973. "Pricing Decisions of Regulated Firms: A Behavioral Approach," Bell Journal of Economics, The RAND Corporation, vol. 4(1), pages 118-140, Spring.
When requesting a correction, please mention this item's handle: RePEc:wly:jpamgt:v:15:y:1996:i:3:p:395-423. 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: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.