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| Author: | Beard, T. R. Kaserman, D. L. Mayo, J. W. |
| Title: | Regulation, competition, and the optimal recovery of stranded costs |
| Journal: | International Journal of Industrial Organization
2003 : JUN, VOL. 21:6, p. 831-848 |
| Index terms: | Industrial policy Competition Market theory Public services Costs |
| Freeterms: | Public utilities |
| Language: | eng |
| Abstract: | In this paper, the authors develop a model of the socially optimal level of stranded cost recovery for a regulated firm facing the prospect of competition for its services under the assumption that past actions by the firm and regulators were rational. Perhaps the most important finding is that under reasonable assumptions full recovery of a firm's costs that are stranded by competition is not generally socially optimal. |
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