Models of Monopoly Regulation

  • Michael A. Crew
  • Paul R. Kleindorfer


This chapter is concerned with examining some simple models of regulation. These take several forms, corresponding to the general concerns of monopoly regulation. They include models of:
  1. 1.

    Profit or price level regulation, including rate-of-return regulation,

  2. 2.

    Price structure regulation, concerned with the structure of tariffs (e.g. mandated peak-load or two-part tariffs),

  3. 3.

    Productivity and incentive regulation concerned with inducing X-efficiency.

Naturally, the scope of regulation is considerably broader than the above three areas of concern here, e.g. including health, safety and environmental regulation, which we neglect. Our concern will be to briefly describe the major theoretical contributions developed to address the above three areas of regulation and for understanding the costs and benefits of applying such regulation to the monopoly problem.


Total Factor Productivity Consumer Surplus Marginal Revenue Capacity Cost Peak Price 
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Copyright information

© Michael A. Crew and Paul R. Kleindorfer 1986

Authors and Affiliations

  • Michael A. Crew
    • 1
  • Paul R. Kleindorfer
    • 2
  1. 1.Graduate School of ManagementRutgers UniversityUSA
  2. 2.University of PennsylvaniaUSA

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