Competition and two-part tariffs
Article Abstract:
For the most part, two-part tariffs have been viewed in the past as price-discriminatory and within the exclusive domain of companies that have real market power (companies that are actual or virtual monopolies). However, two-part tariffs may also be financially beneficial to companies in highly competitive markets, since these price policies provide some assurance to risk-averse buyers and minimize uncertainty related to demand. Moreover, the marginal prices achieved through two-part tariffs that are less than marginal costs can be financed by fixed one-time only costs, such as health club entry fees.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1987
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Rate of return regulation with price flexibility
Article Abstract:
Under present laws, some regulated industries must charge fixed prices established by government agencies, based on a fair expected rate of return. However, if rate of return regulations were revised to allow firms to charge prices within a defined range (and not to exceed a stipulated maximum price), consumers and investors would benefit. A method of determining price ceilings, which accounts for the effect of the proposed legislation on risk and pricing is developed. The method developed is illustrated with a model that emphasizes the variables of demand, production and uncertainty.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1986
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The effects of regulation on research and development: theory and evidence
Article Abstract:
The effects of regulation and firm structure on research and development (R&D) expenditures is examined. A model of firm behavior under a rate of return regulation shows that the key determinants of the firm's level of R&D expenditures will be the extent of the allowed rate of return constraint and the presence or absence of R&D in the firm's rate base. Empirical results are presented which support the theoretical model.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1988
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