American Economic Review Vol. 78 No. 3 1988
Public-Utility Regulators Are Only Human: A Positive Theory of Rational Constraints
Abstract
Positive public-utility models should capture incentives of regulators. Regulatory objectives are specified by appeal to standard human concerns and politics and processes peculiar to public-utility regulation. Constraints that serve the regulator are thereby derived, and connections between regulatory objectives and rules illuminated. Theoretical rationales emerge for "rate-of-return" regulation under certainty, and a largely neglected type of rate-of-return regulation under uncertainty. Motives of human regulators may explain other regulatory forms as well.
- Volume
- 78
- Issue
- 3
- Pages
- 444-462
- Sources
- bibtex:phds-export.bib