The Logic of Natural Monopoly Regulation

Robert Tollison and Richard Wagner ()

Eastern Economic Journal, 1991, vol. 17, issue 4, 483-490

Abstract: The authors explain why the elementary logic of rate-of-return regulation generates not the competitive outcome but the monopoly outcome. Within the framework of the "passive regulator" that this logic entails, public regulation cannot alter the monopoly outcome, but can only change the form in which the monopoly rent is captured. The authors also explain why it is essentially no different even if the regulator is an "active regulator," who does not passively allow as costs all that the monopolist declares to be costs.

Keywords: Monopoly; Regulation (search for similar items in EconPapers)
JEL-codes: D42 L12 L51 (search for similar items in EconPapers)
Date: 1991
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:17:y:1991:i:4:p:483-490

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