A contract design perspective on balancing the goals of utility regulation

Anita Eskesen

Utilities Policy, 2021, vol. 69, issue C

Abstract: Designing utility regulation involves trade-offs between different goals of contract design. Prioritising one objective may come at the cost of assigning a lower priority to another objective. This study compares four regulatory frameworks in terms of how they each prioritise different goals of contract design. While revenue-cap regulation can be said to minimise transaction costs, it also assigns a lower priority to coordination of production. Conversely, the frameworks that explicitly incorporate stakeholder engagement or negotiation prioritise coordination of production while assigning a lower priority to minimisation of transaction costs.

Keywords: Incentive regulation; Customer engagement; Contract design (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:69:y:2021:i:c:s0957178720301521

DOI: 10.1016/j.jup.2020.101161

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