Abstract
Although proposals for price caps are numerous and varied, all subscribe to the common purpose of strengthening incentives for cost efficiencies. Indeed, at this level of generality, few question the potential for price caps to improve upon conventional rate of return regulation. Major complexities—and disagreements—arise in the process of moving price caps from the economic drawing board to actual practice. This paper will discuss one of the central implementation issues of most price-cap plans, namely, the need to adjust prices for increases in firm productivity.
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Kwoka, J.E. (1991). Productivity and Price Caps in Telecommunications. In: Einhorn, M.A. (eds) Price Caps and Incentive Regulation in Telecommunications. Topics in Regulatory Economics and Policy Series, vol 6. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-3976-6_5
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DOI: https://doi.org/10.1007/978-1-4615-3976-6_5
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