Resource Allocation and the Regulated Firm: Comment
Volume: Volume 4, No. 1
Issue: Spring 1973
Pages: pp. 283-287
Authors: A.B. Atkinson and L. Waverman
Title: Resource Allocation and the Regulated Firm: Comment
Abstract: This comment presents an analysis of the effect of regulation on the sales-maximizing firm, and shows that the models used in earlier works have been incorrectly specified. It is demonstrated that under relatively weak conditions, regulation via a "fair" rate of return constraint has no influence on the behavior of the firm, and that any tendency to under-or overcapitalization would be present even if there were no regulation.
JEL Classification
Regulation of Public Utilities (6130)