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|
References listed on IDEAS
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.:
- 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 S. Chirinko & Edward P. Harper, Jr., 1992. "Buckle-Up or Slow-Down? New Estimates of Offsetting Behavior and Their Implications for Automobile Safety Regulation," Working Papers 9207, Harris School of Public Policy Studies, University of Chicago.
- 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.
- 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.
- 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.
- 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. Full references (including those not matched with items on IDEAS)
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 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.