Integration Effects of Firms Subject to Regulation

Yoram Peles and Eytan Sheshinski

Bell Journal of Economics, 1976, vol. 7, issue 1, 308-313

Abstract: The standard model of the regulated firm assumes that the monopoly produces one homogeneous output with two inputs, capital and labor. However, many firms subject to regulatory constraint, particularly public utilities, produce a multitude of products, with related or unrelated demands. This paper explores the modifications required by the latter case in the standard Averch-Johnson model. The effects of mergers between regulated monopolies is also studied. It is shown that, in general, mergers lead to changes in the composition of outputs and the factors that determine the direction of these changes are analyzed. Finally, it is proved that the well-known result concerning the desirability of regulation can be extended, when demands are independent, to the many-good case.

Date: 1976
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://links.jstor.org/sici?sici=0361-915X%2819762 ... O%3B2-S&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:bellje:v:7:y:1976:i:spring:p:308-313

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().