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The paper assesses the welfare effects of different ways of allocating input price risk between a regulated utility, consumers and speculators in a futures market. A risk-averse utility setting a fixed retail price requires a price that exceeds expected marginal cost, unless an efficient futures market is available. The firm bears no risk when input price(More)
for their encouragement, useful insights, and general comments on the present work. Anyhow, the usual disclaimer about remaining errors applies. This paper analyses the efficiency of Italy's local electricity distributors according to two different measurement techniques. Distribution zones belonging to the national monopolist (ENEL) are compared with(More)
When Houston's leading newspaper investigated local for-profit psychiatric hospitals and ran a series of stories that ranged from unflattering to shocking, any hospital administrator might reasonably have expected dramatic effects on public perceptions of the specific hospitals named, and also perhaps on other psychiatric hospitals in the metropolitan area.(More)
This paper investigates the interaction between corruption and infrastructure policy reforms. I construct a simple model to illustrate how both an increase in regulatory autonomy and privatisation may influence the effect of corruption. This interaction is then analysed empirically using a panel of 153 electricity distribution firms across 18 countries in(More)
The regulator of a natural monopoly that sets a two-part tariff and whose marginal cost is stochastic will generally want the price to vary less than marginal cost when the lump-sum charge in the tariff is fixed. A trade-off exists between efficient pricing and an optimal allocation of risk. Pricing at marginal cost is only optimal when the consumer's(More)
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