Repository logo
 

Open Ownership - Not Common Carriage

Loading...
Thumbnail Image

Date

1998

Journal Title

Journal ISSN

Volume Title

Publisher

Te Herenga Waka—Victoria University of Wellington

Abstract

We consider regulating natural monopolies with open ownership and competitive rules as a substitute for common carriage regulation and illustrate it with an application for natural gas pipelines. A single set of production assets exhausts any economies of scale or scope while owners compete with each other due to incentives from open ownership rules that promote efficient investment choices primarily by breaking down barriers to entry and competitive rules that promote an efficient secondary market. We argue that regulating a natural monopoly with these rules in a market structure we call a competitive joint venture significantly increases the efficiency of pricing output and capacity choices and may dramatically reduce regulatory costs when compared to regulating with common carriage.

Description

Keywords

open ownership

Citation