IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v46y1994i3p357-65.html
   My bibliography  Save this article

Regulation as a Bargaining Process: Negotiation over Price and Cost-Reducing Investments

Author

Listed:
  • Scarpa, Carlo

Abstract

This paper develops the idea that industry regulation can be treated as a bargaining between a firm and the public authority, and illustrates some consequences of this formulation. The author investigates a typical regulatory problem where a firm chooses a cost-reducing investment before price is subject to regulation. In a standard scheme, investment will be lower than required by efficiency. If the possibility of negotiation is taken into account, the author then shows that this undercapitalization result can be reversed. Indeed, with sunk costs excessive capitalization can be observed. Copyright 1994 by Royal Economic Society.

Suggested Citation

  • Scarpa, Carlo, 1994. "Regulation as a Bargaining Process: Negotiation over Price and Cost-Reducing Investments," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 357-365, July.
    • Handle: RePEc:oup:oxecpp:v:46:y:1994:i:3:p:357-65
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0030-7653%28199407%292%3A46%3A3%3C357%3ARAABPN%3E2.0.CO%3B2-%23&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Raffaele Fiocco & Mario Gilli, 2012. "Bargaining and Collusion in a Regulatory Model," Chapters, in: Joseph E. Harrington Jr & Yannis Katsoulacos (ed.), Recent Advances in the Analysis of Competition Policy and Regulation, chapter 12, Edward Elgar Publishing.
    2. Francesc Trillas, 2004. "The structure of corporate ownership in privatized utilities," Investigaciones Economicas, Fundación SEPI, vol. 28(2), pages 257-284, May.
    3. Finkelshtain, Israel & Kislev, Yoav, 1996. "Economic Regulation and Political Influence," Working Papers 232692, Hebrew University of Jerusalem, Center for Agricultural Economic Research.
    4. Raffaele Fiocco & Mario Gilli, 2016. "Bargaining and collusion in a regulatory relationship," Journal of Economics, Springer, vol. 117(2), pages 93-116, March.
    5. José Pineda & Francisco Rodríguez, 2006. "The Political Economy of Investment in Human Capital," Economics of Governance, Springer, vol. 7(2), pages 167-193, May.
    6. Montolio, Daniel & Trillas, Francesc, 2013. "Regulatory federalism and industrial policy in broadband telecommunications," Information Economics and Policy, Elsevier, vol. 25(1), pages 18-31.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:46:y:1994:i:3:p:357-65. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.