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dc.contributor.authorBrito, Duarteen_US
dc.contributor.authorPereira, Pedroen_US
dc.contributor.authorVareda, Joãoen_US
dc.description.abstractWe explore the separation of powers between the legislative and the executive branch of government as a way of overcoming the dynamic consistency problem of regulatory policy towards investment. We model the industry as a regulated duopoly. The incumbent is a vertically integrated firm that owns a wholesaler and a retailer. The entrant owns a retailer. Either retailer needs access to the input produced by the wholesaler to operate. The incumbent can make an investment that improves the quality of the input produced by the wholesaler. The regulator sets the access price and is unable to commit. The legislator sets the regulator's objective function and is able to commit. We derive general conditions under which having the legislator distort the regulator's objective function away from social welfare allows increasing the range of parameter values for which it is possible to induce socially desirable investment.en_US
dc.publisherITS Taipeien_US
dc.relation.ispartofseries8th International Telecommunications Society (ITS) Asia-Pacific Regional Conference, Taiwan, 26 - 28 June, 2011: Convergence in the Digital Ageen_US
dc.subject.keywordDynamic Consistencyen_US
dc.subject.keywordRegulator's Objectiveen_US
dc.titleInvestment, dynamic consistency and the sectoral regulator's obectiveen_US
dc.typeConference Paperen_US
Appears in Collections:8th Asia-Pacific Regional ITS Conference, Taipei 2011

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