Assessing the Performance of the Price Cap Plan for Local Exchange Carriers in the United States

In 1991 the FCC implemented a price cap plan for local exchange carriers' interstate access service designed to deal with the regulatory boundaries problem arising from the breakup of AT&T in 1984. The experience with the price cap plan demonstrates the difficulty of predicting productivity growth accurately and makes clear that regulators cannot depend upon a pure price cap plan to keep prices within a reasonable range of costs. With periodic reviews to readjust plan parameters, however, a price cap plan can maintain the rate-of-return close to the target rate-of-return without diminishing the price cap plan's incentives for efficient production. A simple method of recalculating the X-factor based on the rate-of-return over the previous three years worked well in simulations. If this procedure had been used over the price cap period 1991 to 2000, prices would have been 20 percent lower and expenditures on LECs' telecommunications service subject to a price cap would have been $3.8 billion lower.     

Regulating Markets: The Real Costs of Poly-Centric Administration under the National Health Insurance Scheme (1912–46)

Using a transaction cost perspective, this article explores the administrative costs involved in quasi-market systems of public service delivery. Employing the historical example of the interwar National Health Insurance scheme, it revives Beveridge's early criticisms of the duplication and expense incurred by the utilization of approved societies for benefit administration purposes. To this we should add the costs incurred by central audit and actuarial evaluation, the main mechanisms through which the societies were centrally regulated. The article concludes that, thanks to regulatory requirements, this poly-centric system of public administration was more expensive than a state-run equivalent – and that this message has significance for recent reforms. In the course of the analysis, the narrowness of a 'pure' transaction cost perspective is demonstrated and common assumptions concerning distinctions between 'the state and the market' in administrative structures are drawn into question. The division of public administration into these two typologies is arguably based on a false dichotomy.     

接管放弃的决定因素及后果

过去三十年接管行为引起了学术界的广泛关注,其中大多数研究关注于成功的接管,尤其是研究接管行为对被接管目标公司和竞价公司双方股东财富的影响。与成功接管不同的是,被迫放弃的接管行为(即接管放弃)相对而言受学术界的关注较少。这种令人惊讶的现象是因为相当大比例的接管竞价不成功。本文试图通过对接管失败方面文献的综合调研来说明这种研究上的偏颇。本文关注于两方面文献:第一,回顾和讨论可能影响接管结果的因素;第二,分别从目标公司和竞价公司的角度考察接管放弃的后果。还要分析未来的研究领域,这将进一步深化公司对接管放弃的因果关系的认识。     

The median voter hypothesis: Evidence from general purpose local governments

The median voter hypothesis (MVH) represents a much-used as well as much-criticized tool in the hands of public finance economists. To evaluate the MVH, this paper applies the Cox specification test using data from general purpose municipal governments. The Cox test allows for possible simultaneous rejection of the MVH and all tested models, thus providing stricter criteria than applied to date in empirical MVH analyses. The test results reveal that the MVH is appropriate for explaining the aggregate behavior of municipal governments, but not specific services. Further, the single service and single tax base assumptions are not critical to the empirical MVH performance.     

The effects of decentralization on special interest groups

Public Choice - It is well established in the literature that the number of interest group organizations varies across countries and states, with economic freedom and other institutional factors...     

The counterfactual fallacy: Confusing what might have been with what ought to have been

The thesis of this article is that reactions to misfortunes are often biased by the counterfactual fallacy: the tendency to view events that can easily be imagined otherwise as events that ought not to have been. Drawing upon a diverse set of empirical findings we demonstrate that victims' and observers' reactions to misfortunes depend on the extent to which the event prompts them to generate counterfactual thoughts or images of more positive alternatives. We discuss the factors that determine the ease with which a negative event can be imagined otherwise, along with their relevance to a variety of justice-relevant responses, including perceptions of deservingness, recommendations for compensation, and blame assignment.     

Service Quality Effects of Incentive Regulation on Access Service in Telecommunications in the United States

Incentive regulation in the form of price caps was adopted for interstate access service in 1991 as a way to provide local exchange carriers with an incentive to improve their productive efficiency. An issue that has arisen with the adoption of price cap regulation is whether deterioration in service quality for interstate access service has been an unintended consequence. The analysis in this paper uses several different measures of service quality, including the average installation interval, the percent of commitments met, total trouble reports, and the average repair interval for both switched access service and special access service, to investigate empirically whether there has been a decline in service quality between 1991 and 2000. The results are conclusive. Overall service quality has fallen. To rectify the situation, a proposal is offered to adjust the price cap index to penalize LECs who fail to provide an acceptable level of aggregate service quality.