Strategic Behaviour under Regulation Benchmarking
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Authors
Jamasb, Tooraj
Nillesen, Paul
Pollitt, Michael G.
Publication Date
2004-06-16Series
Cambridge Working Papers in Economics
Publisher
Faculty of Economics
Language
en_GB
Type
Working Paper
Metadata
Show full item recordCitation
Jamasb, T., Nillesen, P., & Pollitt, M. G. (2004). Strategic Behaviour under Regulation Benchmarking. https://doi.org/10.17863/CAM.5430
Abstract
Liberalisation of generation and supply activities in the electricity sectors is often followed by regulatory reform of distribution networks. In order to improve the efficiency of distribution utilities, some regulators have adopted incentive regulation schemes that rely on performance benchmarking. Although regulation benchmarking can influence the �regulation game�, the subject has received limited attention. This paper discusses how strategic behaviour can result in inefficient behaviour by firms. We also present a survey of issues encountered by electricity regulators. We then use the Data Envelopment Analysis (DEA) method with US utility data to examine implications of selected cases of strategic behaviour. The results show that gaming can have significant effects on the measured performance and profitability of firms.
Keywords
Classification-JEL: L94, gaming, strategic behaviour, regulation, benchmarking, electricity
Identifiers
This record's DOI: https://doi.org/10.17863/CAM.5430
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