The Investment Effects of Price Caps under Imperfect Competition. A Note.

Anton Burger, Stefan Bühler, Robert Ferstl

Publikation: Working/Discussion PaperWU Working Paper

14 Downloads (Pure)

Abstract

This note analyzes a simple Cournot model where firms choose outputs and capacities facing varying demand and price-cap regulation. We find that binding price caps set above long-run marginal cost increase (rather than decrease) aggregate capacity investment.

Publikationsreihe

ReiheWorking Papers / Research Institute for Regulatory Economics
Nummer2008,3

WU Working Paper Reihe

  • Working Papers / Research Institute for Regulatory Economics

Zitat