Despite a long debate over the methods regulators can use to treat deferred income taxes from accelerated depreciation, there appears to be no formal analysis of the conditions under which customers and investors will prefer each method and under which a transition among the methods will leave...

"Bayesian-Ramsey pricing" has been offered to correct for the undue sensitivity of the Baumol and Bradford formulation of Ramsey pricing to relatively small errors in the highly uncertain least-squares estimates of the relevant demand elasticities. This paper provides a derivation of the Ramsey...

Incumbent telephone companies argue for reliance on voluntary negotiations to determine the terms of interconnection, or alternatively for regulated access prices equal to those that an incumbent would accept voluntarily. Such prices are justified as necessary to prevent inefficient entry, based...

The so-called Inverse Elasticity Rule has almost the unanimous support of economists when they prescribe how a regulated firm should price the various products or services it offers. The U.S. Postal Service relied heavily on this rule and its endorsement by professional economists in pricing its...