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.
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.
| Original language | English |
|---|---|
| Publication status | Published - 1 Sept 2008 |