A Simple Model of Firm Behavior Under Regulation and Uncertainty
Volume: Volume 4, No. 1
Issue: Spring 1973
Pages: pp. 304-315
Authors: Stewart C. Myers
Title: A Simple Model of Firm Behavior Under Regulation and Uncertainty
Abstract: This paper is an analysis of how a firm behaves in the face of uncertainty about demand and cost conditions and a known constraint on the rate of return it is allowed to earn. Under these conditions it is improbable that regulation could force a monopoly to make competitive investment and output decisions. This discouraging result is due to uncertainty per se and not to the phenomena discussed by Averch and Johnson.
JEL Classification
Regulation of Public Utilities (6130)
Business Finance (5210)