Consumer Surplus: An Incentive Subsidy

Part of the Topics in Regulatory Economics and Policy Series book series (TREP, volume 17)


The incentive regulation plans adopted by state regulators and reviewed in the last chapter focus on the firm’s expenditures. If the firm reduces its expenditures (either absolutely or relative to its revenues), the incentive schemes give it a share of those savings. The last chapter looked at the specific elements of those plans and how those elements make the plans more or less effective as incentive mechanisms.


Marginal Cost Moral Hazard Consumer Surplus Incentive Regulation Marginal Cost Price 
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Copyright information

© Springer Science+Business Media New York 1994

Authors and Affiliations

  1. 1.Delta PacificOlympia

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