The Investment Effects of Price Caps under Imperfect Competition : A Note
Journal
Economics Letters
ISSN
0165-1765
ISSN-Digital
1873-7374
Type
journal article
Date Issued
2010-02-01
Author(s)
Abstract
We examine the impact of price cap regulation on the capacity investments of oligopolistic suppliers facing time-varying demand. We find that binding price caps set above long-run marginal cost increase (rather than decrease) aggregate capacity investment.
Language
English
Keywords
Capacity
Investment
Cournot competition
Price cap
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Elsevier
Publisher place
Amsterdam
Volume
106
Number
2
Start page
92
End page
94
Pages
3
Subject(s)
Eprints ID
71097