Chang, Kuo-Ping - In: Journal of Regulatory Economics 3 (1991) 4, pp. 349-55
This paper corrects the errors of Peles and Stein's capital-setting (i.e., capital is ex-ante) model and Das' quantity-setting (i.e., all inputs are ex-ante) model. It also shows that rate-of-return regulated firms always overcapitalize in the quantity-setting case, but may overcapitalize,...