IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v141y2025ics0140988324007618.html
   My bibliography  Save this article

On the incentive properties of revenue cap regulation

Author

Listed:
  • Weisman, Dennis L.

Abstract

Revenue cap regulation (RCR) is increasingly common in the energy sector because it purportedly reduces the regulated firm's disincentive to promote conservation. In comparison with price-cap regulation, RCR can yield higher prices, greater energy conservation, lower service quality and decreased cost-reducing innovation. The distortionary effects of earnings sharing on investment in cost-reducing innovation may be lessened under RCR. These properties hold even when the regulated firm is further constrained with a price cap that is set equal to the minimum price that satisfies the RCR constraint.

Suggested Citation

  • Weisman, Dennis L., 2025. "On the incentive properties of revenue cap regulation," Energy Economics, Elsevier, vol. 141(C).
    • Handle: RePEc:eee:eneeco:v:141:y:2025:i:c:s0140988324007618
    DOI: 10.1016/j.eneco.2024.108052
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988324007618
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2024.108052?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    More about this item

    Keywords

    Price caps; Revenue caps; Incentives; Conservation; Efficiency;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

    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:eee:eneeco:v:141:y:2025:i:c:s0140988324007618. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    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.