Skip to main content
Article thumbnail
Location of Repository

Strategic Behaviour under Regulation Benchmarking

By Tooraj Jamasb, Paul Nillesen and Michael G. Pollitt

Abstract

Liberalisation of generation and supply activities in the electricity sectors is often followed by regulatory reform of distribution networks. In order to improve the efficiency of distribution utilities, some regulators have adopted incentive regulation schemes that rely on performance benchmarking. Although regulation benchmarking can influence the �regulation game�, the subject has received limited attention. This paper discusses how strategic behaviour can result in inefficient behaviour by firms. We also present a survey of issues encountered by electricity regulators. We then use the Data Envelopment Analysis (DEA) method with US utility data to examine implications of selected cases of strategic behaviour. The results show that gaming can have significant effects on the measured performance and profitability of firms

Topics: Classification-JEL: L94, gaming, strategic behaviour, regulation, benchmarking, electricity
Publisher: Faculty of Economics
Year: 2004
OAI identifier: oai:www.repository.cam.ac.uk:1810/344
Provided by: Apollo

Suggested articles

Citations

  1. (2002). A quantitative analysis of pricing behaviour in California’s wholesale electricity market during summer doi
  2. (1998). A test for natural monopoly with application to Norwegian electricity distribution, doi
  3. (2002). An empirical investigation of gaming responses to explicit performance incentives, doi
  4. (1998). An Introduction to Efficiency and Productivity Analysis, doi
  5. (1998). Are municipal electricity distribution utilities natural monopolies?, doi
  6. (1962). Behavior of the firm under regulatory constraint,
  7. (2001). Benchmarking and regulation: International electricity experience, doi
  8. (2001). Benchmarking distribution companies, Energy & Power Risk Management,
  9. (1997). Chilean Distribution Tariffs: Incentive Regulation, in (De)Regulation and Competition: The Electric Industry
  10. (2002). Cost reductions, cost padding and stock market prices: The Chilean experience with price cap regulation, doi
  11. (1996). Economies of scale and utilization in the Swiss electric power distribution industry, doi
  12. (1993). Economies of scale in New Zealand electricity distribution industry,
  13. (2000). Electricity market reform in Norway, doi
  14. (1997). Elements of the Swiss Market for Electricity, doi
  15. (1986). Incentive regulation for electric utilities,
  16. (1996). Incentive regulation in the United Kingdom and the United States: Some lessons, doi
  17. (1970). Input choices and rate of return regulation, doi
  18. (2000). Integration of price cap and yardstick competition schemes in electrical distribution regulation, doi
  19. (2003). International benchmarking and regulation: An application to European electricity distribution utilities (forthcoming in Energy Policy). doi
  20. (2001). Introduction to the Theory and Application of Data Envelopment Analysis: A Foundation Text with Integrate Software, doi
  21. (2002). Measuring market inefficiencies in California’s restructured wholesale electricity market, Working doi
  22. (2000). Mergers in the Electricity Distribution Sector - Policy Statement,
  23. (1999). Operating Expenditure Benchmarking: Study Undertaken for the Regulator General
  24. (1995). Ownership and Performance in Electric Utilities, Oxford-New York.
  25. (1999). Price Cap Regulation in the Electricity Sector, Netherlands Electricity Regulatory Service, Hague. Working Paper CMI EP 19/DAE 0312,
  26. (1988). Privatization: An Economic Analysis, LondonCambridge MA, doi
  27. (1994). Productivity differences in multiple output industries, doi
  28. (1982). Regulating a monopolist with unknown costs, doi
  29. (1997). Restructuring, Competition and Regulatory Reform in the US Electricity Sector, doi
  30. (2000). Scale economies in electricity distribution: A semiparametric analysis, doi
  31. (2001). Sizing power,
  32. (2000). Some scattered thoughts on performance measurement for regulation of a natural monopoly network industry, Centre for Efficiency and Productivity Analysis, School of Economic Studies,
  33. (1980). Strategic firm behaviour under a dynamic regulatory adjustment process, doi
  34. (1998). The estimation of an average cost frontier to calculate benchmark tariffs for electricity distribution, Working
  35. (1957). The measurement of productive efficiency, doi
  36. (1986). using cost information to regulate firms, doi
  37. (2003). Working Paper CMI EP 19/DAE 0312,
  38. (2000). Yardstick competition: Theory, design, and practice, CPB Netherlands Bureau for Economic Policy Analysis, Working doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.