From monopoly to markets: Milestones along the road. Occasional paper {number_sign}25
- Maine Public Utilities Commission, ME (United States)
This report analyzes developments in the electric utility industry using the tools of transaction cost economics. During the last thirty years, the tools of economic analysis have been substantially expanded--notably, Oliver Williamson, building on the insights of Coase and others, has made significant contributions through his work in developing the new institutional economics, of which transaction cost economics reasoning plays a major role. Because of the relevance of the new institutional economics to public utilities and public utility regulation, the theoretical insights of the new institutional economics have been applied to many aspects of public utility industry structure, governance, and regulation. The contributions of Joskow and Schmalensee are most notable, but many other economists have made theoretical and empirical contributions. These insights are very applicable to the issues that policymakers and regulators are likely to address as electric restructuring progresses. The goal of this report is to synthesize the theoretical work on the new institutional economics with the recent developments in the electric utility industry--most notably, the rapid trend toward competition in electric generation, both in the US and abroad. Transaction-cost-economics reasoning provides an analytical structure for understanding the implications of asset specificity, asymmetric and imperfect information, reputation effects, ex ante contracting costs, ex post contract maladaption issues, and issues that arise because contracts are incomplete. The insights that transaction cost economics can provide are very timely to the debates currently going on with respect to electric restructuring issues.
- Research Organization:
- Ohio State Univ., National Regulatory Research Inst., Columbus, OH (United States)
- Sponsoring Organization:
- National Association of Regulatory Utility Commissioners, Washington, DC (United States)
- OSTI ID:
- 291019
- Report Number(s):
- NRRI-98-19; ON: DE99000880; TRN: AHC29901%%225
- Resource Relation:
- Other Information: PBD: Aug 1998
- Country of Publication:
- United States
- Language:
- English
Similar Records
Welfare and efficiency benefits of all sources bidding
Sustainable Forest Bioenergy Initiative