Publication: Price caps regulation with capacity precommitment
dc.affiliation.dpto | UC3M. Departamento de Economía | es |
dc.contributor.author | Lemus Torres, Ana Belén | |
dc.contributor.author | Moreno, Diego | |
dc.contributor.editor | Universidad Carlos III de Madrid. Departamento de Economía | es |
dc.date.accessioned | 2016-02-15T12:28:05Z | |
dc.date.available | 2016-02-15T12:28:05Z | |
dc.date.issued | 2014-08-01 | es |
dc.description.abstract | In order to examine the effectiveness of price caps to regulate imperfectly competitive markets in which the demand is uncertain, we study a monopoly that makes irreversible capacity investments ex-ante, and then chooses its output upon observing the realization of demand. When capacity decisions have no precommitment value, price cap regulation remains fully effective. With capacity precommitment, however, the optimal price cap must trade off the incentives for capacity investment and capacity withholding, and is above the unit cost of capacity. While a price cap mitigates market power, it cannot eliminate inefficiencies. Capacity payments provide a useful complementary instrument. | en |
dc.description.sponsorship | We gratefully acknowledge financial support from the Ministerio de Ciencia e Innovación, grant ECO2011‐29762. | en |
dc.format.mimetype | application/pdf | |
dc.identifier.issn | 2340-5031 | es |
dc.identifier.repec | we1309 | |
dc.identifier.uri | https://hdl.handle.net/10016/19349 | |
dc.identifier.uxxi | DT/0000001224 | es |
dc.language.iso | eng | es |
dc.relation.hasversion | http://hdl.handle.net/10016/25186 | |
dc.relation.ispartofseries | UC3M Working papers. Economics | en |
dc.relation.ispartofseries | 13-09 | es |
dc.relation.projectID | Gobierno de España. ECO2011-29762 | es |
dc.rights | Atribución-NoComercial-SinDerivadas 3.0 España | * |
dc.rights.accessRights | open access | en |
dc.rights.uri | http://creativecommons.org/licenses/by-nc-nd/3.0/es/ | * |
dc.subject.other | Monopoly | en |
dc.subject.other | Market Power | en |
dc.subject.other | Price Cap Regulation | en |
dc.subject.other | Capacity Investment | en |
dc.subject.other | Capacity Withholding | en |
dc.subject.other | Demand Uncertainty | en |
dc.title | Price caps regulation with capacity precommitment | en |
dc.type | working paper | * |
dc.type.hasVersion | AO | * |
dspace.entity.type | Publication |
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