Price‐cap regulation and the scale and timing of investment
研究了规模经济如何影响受管制企业的投资行为以及福利最大化的价格与数量管制，发现企业投资规模小于社会最优且更频繁，规模经济越大扭曲越严重。
This article shows how scale economies affect regulated firms’ investment behavior and welfare‐maximizing regulation of price and quantity. Regulated firms invest in smaller, more frequent, increments than social planners, with greater investment distortions the greater the economies of scale. Regulators cap prices at lower levels than planners when economies of scale are moderate, and at higher levels when they are substantial. When quantity is also regulated, the average cost of building capacity increases but the price cap decreases. Immediately after firms make their initial investment, regulators want to transfer surplus from customers to shareholders by raising the price cap to induce additional investment.