Using a model where a monopoly chooses its commodity's quality as well as its quantity, we consider optimal regulation whenthe monopoly's costs are unknown to the regulator. Regarding quantity and quality, the results are a natural extension of Baron and Myerson (1982): the levels of quantity...

We buid a simple model of commuter railways where congestion exists, show that price-cap (PC) regulation causes congestion compared to rate-of-return (ROR) regulation. We next consider methods to correct it, and show the following results: (i) PC regulation, in which the cap is made contingent...

We analyse the rate of return (ROR) regulation that is based on the book value of firm's assts, show how the result of it differ from that predicted from the normal Averch-Johnson (AJ) effect, and compare the book-based ROR regulation with the market-based ROR regulation.

We buid a simple model of commuter railways where congestion exists, show that price-cap (PC) regulation causes congestion compared to rate-of-return (ROR) regulation. We next consider methods to correct it, and show the following results: (i) PC regulation, in which the cap is made contingent...

We analyse the rate of return (ROR) regulation that is based on the book value of firm's assts, show how the result of it differ from that predicted from the normal Averch-Johnson (AJ) effect, and compare the book-based ROR regulation with the market-based ROR regulation.