The duality between cost and production function can be a key point to explore regulation process in Agent-Principal model because the Principal observes outputs in inputs and has asymmetric information about the cost by the Agent. This paper investigates the properties of production functions...

There is a growing consensus among economists that the most procompetitive strategy for restructuring public utility enterprises includes complete vertical separation of the network or grid portion of a sector from other parts of the sector where competition is to be created. Although exceptions...

The freight railways sector has three attributes that have proved problematic for recent experiments with vertical separation: a) a relatively high share of network costs in total delivered service costs, b) an apparent persistence of economies of scale at the "competitive" train operations...

This paper outlines the evolution, structure and operations of US railroads. It traces the evolution of the railroad network and the regulation framework. The current industry structure is also examined along with organization and operational characteristics. The strategies underlying the...

We describe a pair of subadditivity tests that can be used to evaluate the technological feasibility of separating a vertically integrated network monopoly into a common infrastructure component and competing operating components. We implement the tests with a Generalized McFadden cost function...

The objective of this paper is to analyze the impact of regulatory and environmental conditions on technical effciency of European railways. Using a panel data set of 31 railway firms from 22 European countries from 1994 to 2005, a multioutput distance function model, including regulatory and...

Although many economic and business historians have examined how American railroads colluded to raise rates or limit service, they have paid less attention to the many ways railroads cooperated to exchange cars and freight between companies and build needed interconnections. This article...

This report develops a roadmap for reliability policy in network industries. Based on economic theory, we analyse the relationship between reliability and various types of government policy: privatisation, liberalisation, regulation, unbundling, and 'commitment policy'. We let government...

This paper presents a game-theoretic model of a liberalized railway market, in which train operation and ownership of infrastructure are vertically separated. We analyze how the regulatory agency will optimally set the charges that operators have to pay to the infrastructure manager for access...