A non-Bayesian Piecewise Linear Approximation Adjustment Process for Incentive Regulation
Artikel i vetenskaplig tidskrift, 2007

The chord-approximation adjustment process for incentive regulation of public utilities suggested by Vogelsang (1988) induces the regulated firm to engage in strategic behaviour instead of converging to marginal cost pricing. In this paper, we show how a non-Bayesian piecewise linear approximation of demand can eliminate this problem.

Regulatory mechanisms

Incentive regulation


Björn Lantz

Göteborgs universitet

Information Economics and Policy

0167-6245 (ISSN)

Vol. 19 1 95-101


Ekonomi och näringsliv