This chapter examines some of the optimal policies that are used to control a natural monopoly. Although the traditional view suggests that government intervention and natural monopoly go hand in hand, economic analysis since the late 1960s has suggested rather forcefully that there are ways to...

This chapter discusses the three themes of economics research on regulation. The first and oldest deals with market failures and the corrective actions that government can undertake to ameliorate them. The second examines the effects of regulatory policies and asks whether government...