In this study we combine different possibilities to model firm level heterogeneity in Stochastic Frontier Analysis. We show that both observed and unobserved heterogeneity cause serious biases in inefficiency results if left unmodelled. Modelling observed and unobserved heterogeneity treats...

We build a simple model to study service fee competition between an incumbent and an independent ATM deployer, and its optimal regulation. We use the model to analyze an actual regulation of such a market by competition authorities in Finland. We find that socially optimal first-best fees would...

Regulator needs reliable information on which to base its policies when practicing regulation on individual firms. Various benchmarking methods can be used to evaluate the firm specific effectiveness on the industry. In this paper we study the sensitivity problems of the benchmarking processes...