Coase and the Transaction Cost Approach to Regulation

Marian Moszoro and Pablo Spiller

MPRA Paper from University Library of Munich, Germany

Abstract: Early economic research on natural monopoly regulation focused on market failure—pricing tariffs and externalities. While Coase’s multi-tariff marginal cost pricing became the standard, his approach to externality regulation as a contractual issue shifted the debate to transaction costs, but failed to recognize the associated political hazards. The renewed approach to regulation is more cognizant of the interplay of transaction costs and political hazards. In this paper, we show that regulatory rigidities arise as a response to political hazards of opportunistic expropriation and challenges from interested third parties to public agents.

Keywords: Utilities; Regulation; Transaction Costs; Politics; Coase (search for similar items in EconPapers)
JEL-codes: L14 L24 L33 L51 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in Claude Ménard & Elodie Bertrand (ed.), The Elgar Companion to Ronald H. Coase Chapter 19 (2016): pp. 262-275

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/102726/1/MPRA_paper_102726.pdf original version (application/pdf)

Related works:
Chapter: Coase and the transaction cost approach to regulation (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:102726

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().