This paper considers the supplier's strategic delivery lead time in a public procurement setting as the result of the firm's opportunistic behaviour on the optimal investment timing. In the presence of uncertainty on construction costs, we model the supplier's option to defer the contract's...

In this article we analyse the effects of different regulatory schemes (price cap and profit sharing) on a firm's investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not affect a firm's start-up decision relative to a pure price cap...

We show that privatization can be beneficial even if the government is rational and benevolent, and if the firm's economic and informational environment is independent of the governance structure. The model assumes that wage contracts between the firm's owner (government or private entrepreneur)...

The iron and steel industry is one of the most carbon emitting and energy consuming sectors in Europe. At the same time this sector is of high economic importance for the European Union. Therefore, while public environmental and energy policies target this sector, there is political concern that...

This paper evaluates the effects of the lack of regulatory commitment on emission tax applied by the regulator, abatement effort made by the monopoly and social welfare comparing two alternative policy games. The first game assumes that the regulator commits to an ex-ante level of the emission...

Since the seminal works of Schumpeter (1937) and Arrow (1962), economists have recognised that the innovation process is crucially dependent on the strategic environment in which firms operate and on the institutional arrangements which govern the appropriability of economic returns from...

We model the occurrence of an environmental accident as a stochastic event, in particular the situation of an oil spill is explored. Characteristics of the ship operator, and the different types of the ship's operating environment determine a stochastic process governing the time patterns and...

This paper considers a vertically separated industry with an upstream monopolist who supplies an essential input to two downstream Cournot firms. This situation is relevant to a number of sectors, including the telecommunications industry where trunk operators must have access to the local...

We extend the economic theory of regulation to allow for strategic self-regulation that preempts political action. When political "entry" is costly for consumer, firms can deter it through voluntary restraints. Unlike standard entry models, deterrence is achieved by over-investing to raise the...

This paper sheds some light about privatisation in utilities. An empirical analysis based on sales in the electricity sector in 38 countries for the period 1977-97 shows that regulation is a crucial institutional variable in privatisation. Not only does it allow governments to increase the pace...