Abstract
A government authority regulates an upstream monopolist only if there is a sufficient welfare increase to justify doing so. A downstream firm strategically increases costs in order to force regulation upstream. The decision to regulate increases profit downstream, reduces profit upstream and reduces welfare relative to a model with no possibility for welfare-enhancing regulation.
| Original language | English |
|---|---|
| Pages (from-to) | 167-178 |
| Number of pages | 12 |
| Journal | Manchester School |
| Volume | 72 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 1 Mar 2004 |