Price-cap regulation and technical change

• 成果类型: Article
• 署名作者: Heyes, AG; Liston-Heyes, C
• 署名单位: University of London; Royal Holloway University London
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(97)00074-1
• 发表日期: 1998
• 页码: 137-151
• 关键词: cost-reducing technologies; monopolies; price-cap regulation; technical change

摘要

Existing analyses of the implications of price-cap regulation for the development of cost-reducing technologies assume that all R&D is done by the regulated industry. This is unrealistic. We present a simple model of non-cooperative R&D by a regulated firm and a single 'external' developer under a price-cap regime of the sort characterised by Cabral and Riordan. In equilibrium the external developer exerts less R&D than is socially optimal, the regulated firm may exert more or less. A 'tightening' of the regulatory regime impacts the R&D incentives of both players, though in different ways. The optimal regulatory-adjustment parameter may be bigger or smaller than that suggested by existing studies. Despite the scope for duplication of results, research by an outsider necessarily enhances welfare. (C) 1998 Elsevier Science S.A.