Show simple item record

SERVICE QUALITY AND ASYMMETRIC INFORMATION IN THE REGULATION OF MONOPOLIES: THE CHILEAN ELECTRICITY DISTRIBUTION INDUSTRY

dc.contributor.advisorJust, Richard Een_US
dc.contributor.authorMelo, Oscar Alfredoen_US
dc.date.accessioned2008-04-22T16:09:15Z
dc.date.available2008-04-22T16:09:15Z
dc.date.issued2008-01-03en_US
dc.identifier.urihttp://hdl.handle.net/1903/7816
dc.description.abstractThis study is an enquiry about the role that service quality, asymmetric information, scope of regulation and regulator's preferences play in the regulation of monopolies, with an application to the case of the Chilean electricity distribution industry. In Chapter 1, I present the problem of regulating a monopolist and introduce the special conditions that the electricity sector has. Later I discuss the main characteristics of the electricity system that operates in Chile. The literature on regulation is reviewed in Chapter 2. A special emphasis is given to the problems of quality and information, and the lack of its proper joint treatment. In Chapter 3, I develop four theoretical models of regulation that explicitly consider the regulation of price and quality versus price-only regulation, and a symmetric versus asymmetric information structure where only the regulator knows its true costs. In these models, I also consider the effect of a regulator that may have a preference between consumers and the regulated monopolistic firms. I conclude that with symmetric information and independent of the scope of regulation, having a regulator that prefers consumers or producers does not affect the efficiency of the outcome. I also show that the regulator's inability to set quality, thus regulating only price, leads to an inefficient outcome, away from the first best solution that can be achieved by regulating both price and quality, even with asymmetric information, as long as the regulator does not have a "biased" preference for consumers or the monopolistic producers. If the regulator has a "bias," then the equilibrium will be inefficient with asymmetric information. But the effect on equilibrium price and quality depends on the direction of the effect of quality on the marginal effect of price in demand. More importantly, no closed-form solution can be derived unless drastic simplifications are made. To further investigate the outcome of the models, I use numerical simulation in Chapter 4, assuming flexible functional forms and alternative sets of parameters that represent the scenarios of interest. The results show that when the regulator is biased toward consumers (producers), symmetric information models yield higher (lower) quality except for the most efficient firm. Chapter 5 uses data from the electricity sector in Chile and estimates the price and quality elasticity of demand and finds a positive effect of quality on the price elasticity of demand.en_US
dc.format.extent2074435 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_US
dc.titleSERVICE QUALITY AND ASYMMETRIC INFORMATION IN THE REGULATION OF MONOPOLIES: THE CHILEAN ELECTRICITY DISTRIBUTION INDUSTRYen_US
dc.typeDissertationen_US
dc.contributor.publisherDigital Repository at the University of Marylanden_US
dc.contributor.publisherUniversity of Maryland (College Park, Md.)en_US
dc.contributor.departmentAgricultural and Resource Economicsen_US
dc.subject.pqcontrolledEconomics, Generalen_US
dc.subject.pqcontrolledEnergyen_US
dc.subject.pquncontrolledMonopoly Regulationen_US
dc.subject.pquncontrolledElectricity Distributionen_US
dc.subject.pquncontrolledQuality of Serviceen_US
dc.subject.pquncontrolledAsymmetric Informationen_US


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record