Incentive Regulation and the Regulation of Incentives

Glenn Blackmon

ISBN 10: 0792394704 / ISBN 13: 9780792394709

Published by Springer US, Springer US, 1994

About this Item

Druck auf Anfrage Neuware - Printed after ordering - 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.

Seller Inventory # 9780792394709

Bibliographic Details

• Title: Incentive Regulation and the Regulation of Incentives
• Publisher: Springer US, Springer US
• Publication Date: 1994
• Language: English
• ISBN 10: 0792394704
• ISBN 13: 9780792394709
• Binding: Buch
• Condition: Neu
• Dimensions: 241W x 160H x 13D millimeters 241 millimeters width by 160 millimeters height by 13 millimeters depth
• Weight: 401 grams

About this title

Synopsis

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.

Review

`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)