IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v37y1988i1p85-97.html
   My bibliography  Save this article

Minimum Bill Contracts: Theory and Policy

Author

Listed:
  • Masten, Scott E

Abstract

This paper examines the efficiency implications of minimum bill cont racts, and concludes that minimum bill provisions promote rather than impede efficient adaptation to changing circumstances. In particular , minimum bills provide a simple mechanism by which parties faced wit h uncertain demand and rising marginal cost can approximate joint-pro fit maximizing payment schedules in transaction-specific relationship s governed by long-term contracts. The paper also questions the merit of proposals for legislative or regulatory intervention to reduce mi nimum bill obligations in natural gas contracts, and considers the ap propriate legal status of these provisions in the event of contractua l failure. Copyright 1988 by Blackwell Publishing Ltd.

Suggested Citation

  • Masten, Scott E, 1988. "Minimum Bill Contracts: Theory and Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 37(1), pages 85-97, September.
    • Handle: RePEc:bla:jindec:v:37:y:1988:i:1:p:85-97
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-1821%28198809%2937%3A1%3C85%3AMBCTAP%3E2.0.CO%3B2-B&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. Benito Arruñada & Manuel González, 1997. "How competition controls team production: The case of fishing firms," Economics Working Papers 261, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Yukseltan, Ergun & Yucekaya, Ahmet & Bilge, Ayse Humeyra & Agca Aktunc, Esra, 2021. "Forecasting models for daily natural gas consumption considering periodic variations and demand segregation," Socio-Economic Planning Sciences, Elsevier, vol. 74(C).
    3. Neuhoff, K. & von Hirschhausen, C., 2005. "Long-term vs. Short-term Contracts; A European perspective on natural gas," Cambridge Working Papers in Economics 0539, Faculty of Economics, University of Cambridge.
    4. repec:dau:papers:123456789/5372 is not listed on IDEAS
    5. Christian Hirschhausen & Anne Neumann, 2008. "Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer–Importer Relations in the Natural Gas Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(2), pages 131-143, March.
    6. Harish Krishnan & Roman Kapuscinski & David A. Butz, 2010. "Quick Response and Retailer Effort," Management Science, INFORMS, vol. 56(6), pages 962-977, June.
    7. Crocker, Keith J & Lyon, Thomas P, 1994. "What do Facilitating Practices Facilitate? An Empirical Investigation of Most-Favored-Nation Clauses in Natural Gas Contracts," Journal of Law and Economics, University of Chicago Press, vol. 37(2), pages 297-322, October.
    8. Lisa J. Cameron, 2000. "Limiting Buyer Discretion: Effects on Performance and Price in Long-Term Contracts," American Economic Review, American Economic Association, vol. 90(1), pages 265-281, March.
    9. STEPHEN J. DeCANIO, 1990. "Cross‐Contract Crediting Under Ferc Order 500," Contemporary Economic Policy, Western Economic Association International, vol. 8(2), pages 159-175, April.
    10. Navajas, Fernando H., 2008. "Infrastructure integration and incomplete contracts: natural gas in the Southern Cone," MPRA Paper 31025, University Library of Munich, Germany.
    11. Raul V. Fabella, 2016. "Why Fixed Rent Contracts are Less Prevalent: Weak Third Party Enforcement and Endogenous Principal Type," UP School of Economics Discussion Papers 201606, University of the Philippines School of Economics.
    12. Anne Neumann & Sophia Rüster & Christian von Hirschhausen, 2015. "Long-Term Contracts in the Natural Gas Industry: Literature Survey and Data on 426 Contracts (1965-2014)," Data Documentation 77, DIW Berlin, German Institute for Economic Research.
    13. Joseph C. Mullin & Wallace P. Mullin, 1996. "United States Steel's Acquisition of the Great Northern Ore Properties: Vertical Foreclosure or Efficient Contractual Governance?," NBER Working Papers 5662, National Bureau of Economic Research, Inc.
    14. Ergun Yukseltan & Ahmet Yucekaya & Ayse Humeyra Bilge & Esra Agca Aktunc, 2020. "Forecasting Models for Daily Natural Gas Consumption Considering Periodic Variations and Demand Segregation," Papers 2003.13385, arXiv.org.

    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:bla:jindec:v:37:y:1988:i:1:p:85-97. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    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.