Dynamic Natural Monopoly Regulation: Time Inconsistency, Moral Hazard, and Political Environments
量化评估了电力配送垄断监管中的时间不一致性、道德风险和政治意识形态，发现监管承诺能促进投资，而保守政治环境虽提高回报率却增加电力损失。
This paper quantitatively assesses time inconsistency, moral hazard, and political ideology in monopoly regulation of electricity distribution. We specify and estimate a dynamic model of utility regulation featuring investment and moral hazard. We find underinvestment in electricity distribution capital aiming to reduce power outages and use the estimated model to quantify the value of regulatory commitment in inducing greater investment. Furthermore, more conservative political environments grant higher regulated returns but have higher rates of electricity loss. Using the estimated model, we quantify how conservative regulators thus mitigate welfare losses due to time inconsistency but worsen losses from moral hazard.