Intertemporal Price Cap Regulation Under Uncertainty  

Oleh:

Dobbs, Ian M.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 114 no. 495 (Apr. 2004), page 421-440.
Topik: PRICE; price cap; regulation
Fulltext: 421.pdf (161.91KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.13 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This paper examines the intertemporal price cap regulation of a firm that has market power. Under uncertainty, the unconstrained firm 'waits longer' before investing or adding to capacity and as a corollary, enjoys higher prices over time than would be observed in an equivalent competitive industry. In the certainty case, the imposition of an inter - temporal price cap can be used to realise the competitive market solution ; by contrast, under uncertainty, it cannot. Even if the price cap is optimally chosen, under uncertainty, the monopoly firm will generally : (a) under - invest and (b) impose quantity rationing on its customers.

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