This paper analyses the foundations of efficient-firm regulation (implemented in Chile for almost two decades), and the … companies. We show that efficient-firm regulation implies setting prices equal to long-run average cost, which is optimal when … the firm is required to be self-financing. In contrast, this is not true of the best-known alternatives, namely regulation …

years. Network industries have undergone dramatic changes, involving privatisation, liberalisation and de- as well as re-regulation …

Data Envelopment Analysis (DEA) based cost norms have attractive properties in the regulation of natural monopolies … that the regulation will induce socially optimal output levels. In this paper, we analytically and numerically examine the … that the eight-year catch-up period allowed in this regulation gives strong incentives to reduce costs since the firms can …