any given initial expected risk level, optimal risk-taking decisions involving uncertainty in a multi-period world should …

The paper provides a tractable, analytical framework to study regulatory risk under optimal incentive regulation … consumers' preferences. -- Optimal incentive regulation ; regulatory risk ; procurement ; information rents …. Regulatory risk is captured by uncertainty about the policy variables in the regulator's objective function: weights attached to …

prefer regulatory risk and these preferences may contradict both the firm's and consumers'. -- optimal incentive regulation …The paper provides a tractable, analytical framework to study regulatory risk. Regulatory risk is captured by … funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the curvature of aggregate demand …

We analyze the treatment and impact of idiosyncratic or firm-specific risk in regulation. Regulatory authorities … regularly ignore firm-specific characteristics, such as size or asset ages, implying different risk exposure in incentive … regulation. In contrast, it is common to apply only a single benchmark, the weighted average cost of capital (WACC), uniformly to …

Assets with a value of over $130billion are regulated in Australia. We define regulatory risk as being regulation that … increases the cost of servicing this capital and analyse the sources of this risk. We show that unbiased and symmetric errors … will generally create asymmetric risk for the firm, that investors cannot fully diversify against this risk, and that the …

implications are higher the more heterogeneous the sector is. As an example, we use the Danish benchmarking regulation of the waste …

This study aims at characterizing the optimal regulation of risky activities when risk assessment is subjective as a … risk perceptions, which substantially affect the optimal intervention. To explore this issue, we construct a moral hazard … optimal fine level, which is in contrast to the effect of less risk-aversion. We then extend the analysis to the case where …

We investigate the impact of regulatory risk on vertical integration and upstream investment by a regulated firm that … provides an essential input to downstream competitors. Regulatory risk reflects uncertainty about the regulator's commitment to … sets the regulatory policy after the vertical industry structure has been established, some degree of regulatory risk is ex …