Optimal Rate Base Reviews Under Price-Cap Regulation

De Vincenti ClaudioCoco Giuseppe
CEIS Working Papers
This paper demonstrates, in a dynamic model of monopoly regulation with price-cap, that a periodical price review may increase productive efficiency. When the firm’s choice of cost-reducing effort depends on the output supplied, a revision allows the regu
Number: 223
Date: Tuesday, November 1, 2005
Revision Date: Tuesday, November 1, 2005