The paper provides a tractable, analytical framework to study regulatory risk under optimal incentive regulation … consumers' preferences. -- Optimal incentive regulation ; regulatory risk ; procurement ; information rents …. Regulatory risk is captured by uncertainty about the policy variables in the regulator's objective function: weights attached to …

prefer regulatory risk and these preferences may contradict both the firm's and consumers'. -- optimal incentive regulation …The paper provides a tractable, analytical framework to study regulatory risk. Regulatory risk is captured by … funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the curvature of aggregate demand …

The paper provides a tractable, analytical framework to study regulatory risk. Regulatory risk is captured by … funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the curvature of aggregate demand …. 2) It yields a positive information rent effect exactly when demand is convex. 3) Firms benefit from regulatory risk …

Assets with a value of over $130billion are regulated in Australia. We define regulatory risk as being regulation that … increases the cost of servicing this capital and analyse the sources of this risk. We show that unbiased and symmetric errors … will generally create asymmetric risk for the firm, that investors cannot fully diversify against this risk, and that the …