The superior incentive properties of price cap regulation (PCR) derive from breaking the link between revenues and costs which renders the regulated firm the residual claimant for its efficiency gains. Under the Hope standard, regulated firms are constitutionally protected against confiscatory...

This paper examines price level regulation in two-sided markets with linear demands. We find that (i) price level regulation increases the price allocation asymmetry when reservation prices differ between the two sides of the market; and (ii) changes in the level of the price cap are divided...

This report is designed to be a self-contained introduction to performance-based regulation (PBR) with an emphasis on the energy sector in North America. The main topics include: key differences between PBR and traditional cost-of-service regulation (COSR), the various forms of PBR and their...

The analysis reveals that price cap regulation (PCR) as commonly implemented closely approximates atomistic Cournot competition in terms of the pass-through of both industry and firm-specific cost-reducing innovation when the invariance property holds. A key finding is that the aggregate...

In the authors' shared opinion, the economic evidence does not support the regulations proposed in the Commission's Notice of Proposed Rulemaking Regarding Preserving the Open Internet and Broadband Industry Practices (the “NPRM”). To the contrary, the economic evidence provides no support...

In an October 22, 2009 Notice of Proposed Rulemaking, the Federal Communications Commission posed a number of questions regarding the merits of price discrimination given the two-sided structure of broadband markets. The law and economics literature finds that price discrimination is...