This paper shows with a formal model that under monopoly regulation, OPEX-risk can be a source for a CAPEX-bias. If …-OPEX-CAPEX- share (FOCS) which is a variation of TOTEX-regulation and second, OPEX-mark-up. FOCS internalizes the CAPEX-bias and can be …

CAPEX-bias occurs when the OPEX solution is the more efficient approach, but regulation sets distorted incentives to choose … the CAPEX solution. This paper presents a promising approach to address the CAPEX-bias: the fixedOPEX-CAPEX-share (FOCS …). With FOCS, all expenses, whether for capital goods (CAPEX) or operational measures (OPEX), are treated as TOTEX. A fixed …

costs in a so-called base year. Such regulation is employed, among others, to govern electricity distribution operators in …. A connected set of price caps exists so that a hybrid regulation consisting of any element in this set and the cost …

reduces economic welfare in all instances. That is, even with monopoly supply, regulation offers no improvement in economic … Access services. Given the present debate over expanding price regulation in this sector, the importance of market definition … on the expected economic effects of regulation is worth evaluating. In this paper, we demonstrate that if geographic …

This paper contributes a theoretical analysis of the effects of different types of regulation on the timing of monopoly … base, we distinguish between price-based regulation and cost-based regulation. Under cost-based regulation, investment … triggers a change of regulated prices, whereas, under price-based regulation, investment does not affect them. To motivate …

We compare two instruments to regulate a monopoly that has private information about its demand: fixing the price or … explore what proportion of welfare gains achievable by sophisticated regulation can be secured using simpler mechanisms and … also discuss the case regarding private information about the monopoly's costs …

market, monopoly pricing is well defined - as well as tests for predatory behavior; not so with multisided markets. Since the … markets for their potential for determining consumers' harm and welfare effects, as well as defining monopoly and predatory …

We consider the regulation of a monopoly facing consumers that may evade payments, an important issue in public … utilities. To maximize total surplus, the regulator sets the price and socially costly transfers, ensuring that the monopoly …

service) is subject to regulation. In these industries, regulators are confronted with the potential exercise of market power … by the upstream affiliate when choosing the optimal form of downstream regulation. This paper finds that downstream … regulation in the form of price caps can eliminate the exercise of market power by the regulated firm's upstream affiliate. With …

This chapter provides a comprehensive overview of the theoretical and empirical literature on the regulation of natural … monopolies. It covers alternative definitions of natural monopoly, public interest regulatory goals, alternative regulatory … institutions, price regulation with full information, price regulation with imperfect and asymmetric information, and topics on the …