A Note on the Effect of Rate-of-Return Regulation under Uncertainty.

This paper corrects the errors of Peles and Stein's capital-setting (i.e., capital is ex-ante) model and Das' quantity-setting (i.e., all inputs are ex-ante) model. It also shows that rate-of-return regulated firms always overcapitalize in the quantity-setting case, but may overcapitalize, undercapitalize, or produce efficiently in the capital-setting case. Copyright 1991 by Kluwer Academic Publishers

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Year of publication:	1991
Authors:	Chang, Kuo-Ping
Published in:	Journal of Regulatory Economics. - Springer. - Vol. 3.1991, 4, p. 349-55
Publisher:	Springer

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005678411