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Regulation by Prices and by Command

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  • Glazer, Amihai
  • Lave, Charles

Abstract

Standard economic theory states that regulation by price is more efficient than regulation by command and control. Exceptions may arise of regulators have good knowledge of the supply curve. In practice, though, governments usually regulate by command and control, and do so when there is uncertainty about the technology of supply. We show that government may prefer to regulate by command and control when it cares about the investment decisions of a firm.

Suggested Citation

  • Glazer, Amihai & Lave, Charles, 1995. "Regulation by Prices and by Command," University of California Transportation Center, Working Papers qt6bs9v6wk, University of California Transportation Center.
  • Handle: RePEc:cdl:uctcwp:qt6bs9v6wk
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    References listed on IDEAS

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    1. Martin L. Weitzman, 1974. "Prices vs. Quantities," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 477-491.
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    Cited by:

    1. Stéphanie Souche & Charles Raux, 2006. "Perception of the fairness of pricing," Post-Print halshs-00109055, HAL.
    2. Ioulia Ossokina & Otto Swank, 2008. "Adoption Subsidy Versus Technology Standards Under Asymmetric Information," De Economist, Springer, vol. 156(3), pages 241-267, September.
    3. Charles Raux & Stéphanie Souche & Yves Croissant, 2009. "How fair is pricing perceived to be? An empirical study," Public Choice, Springer, vol. 139(1), pages 227-240, April.
    4. Van Dender, Kurt, 2009. "Energy policy in transport and transport policy," Energy Policy, Elsevier, vol. 37(10), pages 3854-3862, October.

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