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Alternative Institutional Frameworks For Price Incentive Mechanisms

Author

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  • JÖrg Finsinger
  • Ingo Vogelsa

Abstract

The paper contains incentive mechanisms for the control of natural monopoly. They are based on the observation that government lacks information on industry costs and market demands which the managers of natural monopoly firms hold. Thus, all mechanisms only make use of publicly accessable information. They are all adjustment processes derived from the common principle to share the benefits of quantity weighted price reductions between the firm and the public. Differences between the mechanisms relate to their welfare objective and the institutional environment. Our findings show that the institutional environment does matter both as regards distributional consequences and the possibilities to reach efficient solutions.

Suggested Citation

  • JÖrg Finsinger & Ingo Vogelsa, 1981. "Alternative Institutional Frameworks For Price Incentive Mechanisms," Kyklos, Wiley Blackwell, vol. 34(3), pages 388-404, August.
    • Handle: RePEc:bla:kyklos:v:34:y:1981:i:3:p:388-404
    DOI: 10.1111/j.1467-6435.1981.tb01196.x
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    Cited by:

    1. Prieger, James E. & Sanders, Nicholas J., 2012. "Verifiable and non-verifiable anonymous mechanisms for regulating a polluting monopolist," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 410-426.
    2. Jim Engle-Warnick & Bradley Ruffle, 2002. "Buyer Countervailing Power versus Monopoly Power: Evidence from Experimental Posted-Offer Markets," Economics Papers 2002-W14, Economics Group, Nuffield College, University of Oxford.
    3. Stronzik, Marcus, 2013. "Investitions- und Innovationsanreize: Ein Vergleich zwischen Revenue Cap und Yardstick Competition," WIK Discussion Papers 379, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    4. Benard, Jean, 1987. "Socialist incentive schemes and price planning," CEPREMAP Working Papers (Couverture Orange) 8735, CEPREMAP.
    5. Georg Meran & Christian Hirschhausen, 2009. "A modified yardstick competition mechanism," Journal of Regulatory Economics, Springer, vol. 35(3), pages 223-245, June.
    6. Mark Armstrong & David E.M. Sappington, 2006. "Regulation, Competition and Liberalization," Journal of Economic Literature, American Economic Association, vol. 44(2), pages 325-366, June.
    7. Ismail Saglam, 2024. "The Bayesian approach to monopoly regulation after 40 years," Journal of Regulatory Economics, Springer, vol. 65(1), pages 108-136, June.
    8. Nir Becker & Mira Baron & Mordechai Shechter, 1993. "Economic instruments for emission abatement under appreciable technological indivisibilities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(3), pages 263-284, June.
    9. Matt Essen, 2014. "A Clarke tax tâtonnement that converges to the Lindahl allocation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(2), pages 309-327, August.
    10. Stefan Seifert, 2014. "Effizienzanalysemethoden in der Regulierung deutscher Elektrizitäts- und Gasversorgungsunternehmen," DIW Roundup: Politik im Fokus 40, DIW Berlin, German Institute for Economic Research.
    11. Armstrong, Mark & Sappington, David E.M., 2007. "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 27, pages 1557-1700, Elsevier.
    12. Matt Van Essen, 2013. "Regulating the Anticommons: Insights from Public‐Expenditure Theory," Southern Economic Journal, John Wiley & Sons, vol. 80(2), pages 523-539, October.

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