Under what conditions does cost-of-service regulation lead firms to distort costs? This paper analyzes changes in fuel …-level legislation that ended cost-of-service regulation among investor-owned electric utilities in the late 1990s. I construct a … under cost-of-service regulation. I then show that the drop in the price of coal is associated with a reallocation of …

Although the allocative efficiency benefits of competition are a tenet of microeconomic theory, the relation between … competition and technical efficiency is less well understood. Neoclassical models of profit-maximization subsume static cost …-minimizing behavior regardless of market competitiveness, but agency models of managerial behavior suggest possible scope for competition …

, competition entails narrower allocative inefficiencies but, also, smaller expected profits and, thus, weaker incentives to invest …

, competition entails narrower allocative inefficiencies but, also, smaller expected profits and, thus, weaker incentives to invest …

The determinants of incentive regulation are a key issue in economics. More powerful rules relax allocative distortions …

, competition entails narrower allocative inefficiencies but, also, smaller expected profits and, thus, weaker incentives to invest …

The determinants of incentive regulation are an important issue in economics. More powerful rules relax allocative …

The determinants of incentive regulation are an important issue in economics. More powerful rules relax allocative …