This article by Jeffrey I. Bernstein of Carleton University and the NBER discusses the use of total factor productivity for price setting in regulated industries. He argues that the longterm, industry-wide productivity experience that is not subject to strategic manipulation by regulated firms...

We show that the incentives a vertically integrated supplier may have to disadvantage or "sabotage" the activities of downstream rivals vary with both the type of sabotage and the nature of downstream competition. Cost-increasing sabotage is typically profitable under both Cournot and Bertrand...