In regulation of network services such as the distribution of electricity, gas and water prices have traditionally been based on own costs of companies. Recently a few regulatory bodies in Europe started to use yardstick competition, a scheme that links prices to the performance of other...

In many markets there is some form of regulation; and when new policy measures are introduced into a particular sector, the question of how to structure an adequate regulatory process arises. This paper contributes to the literature by describing the approach taken in the nursing home sector in...

We model the regulation of irreversible capacity expansion by a firm with private information about capacity costs, where investments are financed from the firm's cash flows and demand is stochastic. The optimal mechanism is implemented by a revenue tax that increases with the price cap. If the...

We study optimal risk adjustment in imperfectly competitive health insurance markets when high-risk consumers are less likely to switch insurer than low-risk consumers. First, we find that insurers still have an incentive to select even if risk adjustment perfectly corrects for cost differences...

When a monopolist has discretion over the timing of infrastructure investments, regulation of post-investment prices interferes with incentivizing socially optimal investment timing. In a model of regulated lumpy investment under uncertainty, we study regulation when the regulator can condition...