This paper studies the effect of soft-budget constraints in a pure adverse selection model of monopoly regulation. We … regulatory set-up in which firms are free to enter natural monopoly markets and to choose their price and output levels as in the …-up allows governments to avoid re-funding moneyloosing firms and that welfare is larger than under traditional regulation where …

Intro -- Contents -- Acknowledgments -- 1. Monopoly as a Contracting Problem -- 2. The Choice of Regulatory Strategy …: Electricity in the Americas -- II Contract versus Discretionary Regulation -- 7. The Evolution of Concession Contracts: Municipal …-Cap Regulation: The British Water Industry -- III Vertical Unbundling and Regulation -- 10. The Trade-off in Unbundling: Competition …

The paper studies the impact of government budget constraint in a pure adverse selection problem of monopoly regulation …. The government maximizes total surplus but incurs some cost of public funds. An alternative to regulation is proposed in …-post with the private firms. This ex-post contracting set-up allows more flexibility than traditional regulation where …

"Regulatory reform" once meant either "alternatives to rate-of-return regulation" or "the advantages of privatization … separation between potentially competitive "upstream" sectors and their corresponding natural monopoly grid sectors. This paper …