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
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

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Lundin, Erik
  • Research Institute of Industrial Economics (IFN)

Entstanden

  • 2013

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