The 1996 Telecommunications Act requires incumbent local exchange telephone companies to provide components of their networks to their competitors at prices “based on cost.” The Federal Communications Commission devised a pricing methodology to be used by state regulatory commissions in...

This article reconciles the psychological notion of bonuses and penalties as incentive devices with an economic view of incentives. An objective definition of bonus and penalty schemes is presented and shown to correspond to equilibria in a model of moral hazard and probabilistic monitoring. The...

A central concern of antitrust analysis is determining whether or not a firm possesses significant market power. The trend in the US and many other countries toward liberalized regulation or deregulation of telecommunications providers has been accompanied by the application of these antitrust...