Dynamics of Price Regulation
研究行业适应技术进步时价格监管的动态影响，比较了收益率监管与价格上限监管对资本投资和替换决策的效果，并解释了电信市场的监管改革。
We study the dynamics of price regulation for an industry adjusting to exogenous technological progress. First, we characterize the optimal capacity path and replacement cycles in a neoclassical investment model. Second, we show that naive rate-ofreturn regulation, which ignores components of economic depreciation, eventually results in a deficient level of capacity due to excessively high retail prices burdened by the need to recover the underdepreciated costs of historical investments. Third, we explain how price-cap regulation leads to more efficient capital replacement decisions compared to naive rate-of-return regulation, and we show how finite price cap horizons distort capital replacement. Finally, we interpret recent regulatory reforms in telecommunications markets.