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| Author: | Braeutigam, R. R. |
| Title: | A regulatory bargain for diversified enterprises. |
| Journal: | International Journal of Industrial Organization
1993 : MAR, VOL. 11:1, p. 1-20 |
| Index terms: | BARGAINING MODELS ENTERPRISE DIVERSIFICATION RETURN ON INVESTMENT |
| Language: | eng |
| Abstract: | This paper examines an alternative to traditional rate of return regulation and price cap regulation for public utilities which serve both non-competitive and competitive markets. The alternative is a regulatory bargain in which the allowed economic profit for the firm is tied to the level of net economic benefits accruing to the customers in non-competitive markets. This form of regulation is shown to lead to cost minimizing production, efficient pricing in competitive and non-competitive markets, the protection of customers in non-competitive markets from economic harm. |
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