We develop a model that examines the capital structure and investment decisions of regulated firms in a setting that incorporates two key institutional features of the public utilities sector in many countries: firms are partially owned by the state and regulators are not necessarily...

We analyze the interaction between financial institutions' internal compensation policy, the quality of loans, and their securitization decision. We also assess the case for requiring financial institutions to defer bonus pay so as to make incentives more commensurate with the longer-term risk...

This paper examines the effects of a competitive fringe on a regulated firm. Using Hart's (1983) model, we show that competition weakens the managerial incentives for cost reduction: when there is correlation between the cost levels of the firms in the industry, costs are higher in the regulated...

This paper studies the optimal regulatory policy in a market where entry may occur. The regulator regulates the incumbent, but not the entrant in the event of entry. We show that the effect of entry on prices and incentives for cost reduction depends on the extent of the regulator's commitment:...

This paper provides factual evidence on the extent of public intervention in the Italian economy. It further illustrates the internal contradictions and weaknesses of public action in Italy. New policy proposals to solve old structural problems of the Bel Paese are then discussed. Among them, a...