that the eight-year catch-up period allowed in this regulation gives strong incentives to reduce costs since the firms can …Data Envelopment Analysis (DEA) based cost norms have attractive properties in the regulation of natural monopolies … to suboptimal incentives. When a regulated firm compares the marginal change in its cost norm with its marginal cost of …

investigate the incentives of a DEA based regulation when some of the demand dimensions, the cost drivers, can, in fact, be … controlled by the monopoly. In such cases, the classical DEA based regulation may lead to suboptimal incentives. Specifically, we … used to regulate Danish water firms. We show that the catch-up period allowed in this regulation gives strong incentives to …

suggest that incentive regulation in the sense of regulatory and benchmark incentive schemes have a significant positive … conditions. The analysis demonstrates that in absence of clear and structural incentives the average efficiency of the utilities … falls in comparison with utilities which are encouraged by incentives …

. The paper explores both explicit and implicit incentives in the context of economic regulation. Explicit incentives are … those regulators have purposely designed to influence the choices regulated entities make. In contrast, implicit incentives …

plans to implement revenue cap regulation together with yardstick competition. Revenue cap regulation could bear the ratchet … ; regulation …

-of-return regulation is generally thought to result in over investment, while incentive regulation is believed to entail underinvestment …. Yet, previous empirical work has generally found that the introduction of incentive regulation has not systematically …-of-return regulation because investment decisions (what can be included in the rate base) are usually evaluated in a discretionary manner …

We propose a difference-in-differences (DiD) approach to estimate the impact of incentives on cost reduction. We show … subject to a lower powered regulation mechanism. The difference is particularly significant (about 7%) for firms in the upper …

associated with the X-factor in a price/revenue cap regulation and cost of capital, whilst at the same time increasing overall …

results suggest reformed incentives for third-party auditors can improve their reporting and make regulation more effective …