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Strategic behaviour under regulation benchmarking

Author

Listed:
  • Tooraj Jamasb

    (Department of Applied Economics, University of Cambridge)

  • Paul Nillesen

    (Regulatory Affairs, REMU NV Kuelsekade 189, Utrecht, The Netherlands)

  • Michael Pollitt

    (Judge Institute of Management, University of Cambridge)

Abstract

Liberalisation of generation and supply activities in the electricity sectors is often followed by regulatory reform of distribution networks. In order to improve the efficiency of distribution utilities, some regulators have adopted incentive regulation schemes that rely on performance benchmarking. Although regulation benchmarking can influence the “regulation game”, the subject has received limited attention. This paper discusses how strategic behaviour can result in inefficient behaviour by firms. We also present a survey of issues encountered by electricity regulators. We then use the Data Envelopment Analysis (DEA) method with US utility data to examine implications of selected cases of strategic behaviour. The results show that gaming can have significant effects on the measured performance and profitability of firms.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Tooraj Jamasb & Paul Nillesen & Michael Pollitt, 2003. "Strategic behaviour under regulation benchmarking," Working Papers EP19, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:ep19
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    References listed on IDEAS

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    Cited by:

    1. J-M- Glachant & H. Khalfallah & Y. Perez & V. Rious & M. Saguan, 2013. "Implementing Incentive Regulation and Regulatory Alignment with Resource Bounded Regulators," Competition and Regulation in Network Industries, Intersentia, vol. 14(3), pages 265-291, September.
    2. Antonio Estache & Sergio Perelman & Lourdes Trujillo, 2006. "Infrastructure Reform in Developing Economies: Evidence from a survey of efficiency measures," ULB Institutional Repository 2013/44062, ULB -- Universite Libre de Bruxelles.
    3. Jean-Michel Glachant & Haikel Khalfallah & Yannick Perez & Vincent Rious & Marcelo Saguan, 2013. "Implementing incentive regulation through an alignment with resource bounded regulators," Post-Print halshs-00767872, HAL.

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    More about this item

    Keywords

    gaming; strategic behaviour; regulation; benchmarking; electricity;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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