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Incentive Regulation and the Regulation of Incentives : TOPICS IN REGULATORY ECONOMICS AND POLICY - Glenn Blackmon

Incentive Regulation and the Regulation of Incentives

TOPICS IN REGULATORY ECONOMICS AND POLICY

Hardcover Published: 31st August 1994
ISBN: 9780792394709
Number Of Pages: 133

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The class is theory of price regulation assumed that the regulator knows the fIrm's costs, the key piece of information that enables regulators to pressure fmns to choose appropriate behaviors. The "regulatory problem" was reduced to a mere pricing problem: the regulator's goal was to align price with marginal cost, subject to the constraint that revenues must cover costs. Elegant and important insights ensued. The most important was that regulation was inevitably a struggle to achieve second-best outcomes. (Ramsey pricing was a splendid example. ) Reality proved harsh to regulatory theory. The fmn's costs are by no means known to the regulator. At best, the regulator may know how much is currently spent to provide services, but hardly what costs would be if the fmn vigorously pursued effIciency. Even if the current cost curve were known to the regulator, technologies change so swiftly that today's costs are a very poor indicator of tomorrow's, and those are the costs that will determine the fIrm's future decisions. With the burgeoning attention to information considerations and game theory in economics, the regulator's problem of eliciting host information about cost has received considerable attention. In most cases, however, it has been in context that are both static and stylized; such analyses rarely capture many of the essential elements of real world regulatory issues. This volume represents a fresh approach. It reflects Glenn Blackmon's twin strengths, a keen analytic mind and important experience in the regulatory arena.

`To sum up, Glenn Blackmon has written a fine book that repreents a valuable contribution to the literature on incentive regulation. He poses the `right' questions and supplies thought-provoking answers. The exposition is clear and well-motivated with the right mix of theory and practice. It should prove to be a useful reference for regulatory practitioners and academics alike. In a classroom setting, it would be an ideal supplemental text for a standard course in regulatory economics. It is well worth reading!' Review of Industrial Organization, 11 (1996)

Foreword
Acknowledgements
Introductionp. 1
Why Incentives?p. 5
Regulatory Lag, Monitoring, and the Problem of Abusep. 23
Incentive Regulation and the Half Loafp. 49
Consumer Surplus: An Incentive Subsidyp. 87
Recommendations and Conclusionp. 103
Bibliographyp. 109
Notesp. 117
Indexp. 129
Table of Contents provided by Blackwell. All Rights Reserved.

ISBN: 9780792394709
ISBN-10: 0792394704
Series: TOPICS IN REGULATORY ECONOMICS AND POLICY
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 133
Published: 31st August 1994
Publisher: Springer
Country of Publication: NL
Dimensions (cm): 24.13 x 16.51  x 1.27
Weight (kg): 0.41