This paper analyzes how far a regulated price should be adjusted to realized marginal cost in a stochastic environment. Lyon (1996) shows that partial cost passthrough will improve welfare relative to an exogenously fixed price cap even if incentives for effort supply are reduced. In this paper...

Fiber deployment of next-generation high-speed broadband networks is considered to be a decisive development for any information-based society, yet investment activities and especially the adoption of fiber-based broadband services take place only very gradually in most countries. This work...