The Impact of Rate-of-Return Regulation on Technological Innovation: 1st Edition (Paperback) book cover

The Impact of Rate-of-Return Regulation on Technological Innovation

1st Edition

By Mark W. Frank


146 pages

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This book contends that various forms of regulation have costs as well as benefits and it examines the impact of government regulation on the innovativeness of ’monopolies’ - in this book meaning firms with the power to affect market price. The government regulation analyzed in this case is limited to rate-of-return regulation. Using theoretical models such as the Averch-Johnson model and a two-stage Nash equilibrium model, this volume examines whether regulated monopolies engage in more or less technological innovation than unregulated monopolies. Furthermore, if the unregulated (or less regulated) monopolies do engage in more research and development than regulated ones, it questions whether social welfare would be greater with the former. Using a case study of ten privately-owned electric utilities in the State of Texas, USA, it then tests out the general propositions brought forward by the theoretical modelling and finally makes its conclusions taking into consideration both theoretical and empirical findings.


’This book will be of interest to anyone concerned with technological change and/or the impact of public policy on growth…In addition to its application to rate-of-return regulation, the reader will find this book suggestive for further research into the impact upon technological change of other forms of regulation.’ Professor Barry J. Seldon, University of Texas, USA ’This book has provided a thorough overview and interesting extension of the impact of government regulation on innovativeness.’ Review of Industrial Organisation

Table of Contents

Contents: Introduction; The rate of return regulation; The Averch-Johnson model; Augmented Averch-Johnson; Research joint ventures; Evidence from electric utilities in Texas; Implications and conclusions; Bibliography; Index.

About the Author

Mark W. Frank, Sam Houston State University, Huntsville, Texas, USA

About the Series

Bruton Center for Development Studies Series

Bruton Center for Development Studies Series
The Bruton Center for Development Studies is a part of the School of Social Sciences at the University of Texas at Dallas, and brings an interdisciplinary focus to the study of development. Located in a dynamic metropolitan area that is playing an increasing role in the emerging global economy, the Center recognizes the growing significance of information and technology in local, national and global development. Research conducted within the Center includes both theoretical and empirical investigations of regional housing markets; mobility and location choices of households and business; interaction of land use and transportation; relationships between spatial patterns of development and the dynamics of regional economies, and on the interaction of market forces and public policies in shaping development.

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Subject Categories

BISAC Subject Codes/Headings:
BUSINESS & ECONOMICS / Economics / Theory