Arbeitspapier
Strategic interaction vs. regulatory compliance among regulated utilities: The Swedish water sector
This study provides the first empirical test of strategic interactions in the pricing decisions of regulated utilities. Since publicly owned water utilities in Sweden are governed by a cost-of-service regulation, prices in neighboring municipalities should not affect the own price other than through spatially correlated cost factors. In contrast, spatial dependence is pronounced. This behavior can be explained in terms of an informal yardstick competition: When consumers use neighboring utilities' prices as benchmarks for costs or as behaviorally based reference prices, utilities will face the risk of consumer complaints and successive regulatory reviews if deviating too much from neighbors' prices.
- Sprache
-
Englisch
- Erschienen in
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Series: IFN Working Paper ; No. 998
- Klassifikation
-
Wirtschaft
- Thema
-
yardstick competition
spatial econometrics
public economics
utilities
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Lundin, Erik
- Ereignis
-
Veröffentlichung
- (wer)
-
Research Institute of Industrial Economics (IFN)
- (wo)
-
Stockholm
- (wann)
-
2013
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Lundin, Erik
- Research Institute of Industrial Economics (IFN)
Entstanden
- 2013