Trigger price regulation

Article Abstract:

The problem of determining public utility rates lies in the particular relationship between the utility firm and the regulator firm in terms of the relationship's duration and degree of cooperation between the two entities. Rate-setting is susceptible to opportunistic behavior. An equilibrium exists when the profit-maximizing firm and the surplus-maximizing regulator agree on a particular price policy. Any aberration or inefficiency in the agreement should trigger a penalty in which case the regulator reduces prices to operating expense level and the utility firm stops investment.

Prices and rates, Price control, Price regulations

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Revolving doors and the optimal tolerance for agency collusion

Article Abstract:

A study was conducted on the effect on the regulator's performance incentives of the existence of a revolving door and the tendency for the regulator and the regulated firm to collude. Deviating from its negative image, the regulatory system may actually favor the government since these efforts at regulation for the enhancement of industry qualifications may affect the government's regulatory performance and may make the regulator more aggressive in showing the government's industry qualifications to the firm.

Conflict of interests (Agency), Conflicts of interest

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Behind the revolving door: a new view of public utility regulation

Article Abstract:

The revolving door phenomenon has been closely observed since it is believed to invite corruption. It is not uncommon to discover retired regulatory officials working for companies which they used to regulate. Yet it has been found that the phenomenon actually results in a better performance of the regulated utilities when each side acts on the basis of past actions. However, the significance of the revolving-door regulation on an investment level was not explored.

Regulation and Administration of Communications, Electric, Gas, and Other Utilities, Utilities Regulation, Laws, regulations and rules, Utility regulations, Independent regulatory commissions

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