The investment effects of price caps under imperfect competition: A note

Stefan Buehler, Anton Burger and Robert Ferstl

Economics Letters, 2010, vol. 106, issue 2, 92-94

Abstract: We examine the impact of price cap regulation on the capacity investments of oligopolistic suppliers facing time-varying demand. We find that binding price caps set above long-run marginal cost increase (rather than decrease) aggregate capacity investment.

Keywords: Capacity; Investment; Cournot; competition; Price; cap (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:106:y:2010:i:2:p:92-94

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