Multi-Period Dea Incentive Regulation in Electricity Distribution
Per Agrell (),
Peter Bogetoft and
No 2000-13, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics
Multi-period multi-product regulatory schemes for electricity distributors are presented, based on cost information from a productivity analysis model and an agency theoretical decision model. The proposed schemes are operational and demonstrate considerable advantages compared to the popular CPI-X revenue cap regulation. The schemes avoid arbitrariness, too high or negative informational rents as well as ratchet effects and they promote rapid productivity catch-up by making full use of available data. More generally, the paper contributes to the theoretical unification between firm-based Data Envelopment Analysis (DEA) productivity models and micro-economic reimbursement theories.
Keywords: Regulation; Efficiency analysis; Incentive systems (search for similar items in EconPapers)
JEL-codes: L51 D82 L94 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:kud:kuieci:2000-13
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