This paper analyses simultaneous regulation of cost and quality when firms have private, correlated information about …

-of-return regulation is generally thought to result in overinvestment, while incentive regulation is believed to entail underinvestment …. Yet, previous empirical work has generally found that the introduction of incentive regulation has not systematically …-of-return regulation because investment decisions (what can be included in the rate base) are usually evaluated in a discretionary manner …

underlying state of the world (the basic propability of high downstream prices, or the type of the firm), optimal regulation uses …

terms of financial transmission rights. Our mechanism applies the incentive-regulation logic of rebalancing a two …

underlying state of the world (the basic probability of high downstream prices, or the type of the firm), optimal regulation uses …

Under ex ante access regulation entrants often claim that access fees are excessive. I show that this is only the case … strictly positive access fee which may exceed the efficient level. Ex post regulation facilitates this type of collusion and …