Behavior of the Firm Under Regulatory Constraint: Note

A recent article by Akira Takayama discusses an earlier paper by Harvey Averch and Leland L. Johnson on fair rate of return regulation of public utilities. This article discusses several of Takayama's criticisms in addition to showing that the so-called "A-J Effect" cannot be derived...

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Bibliographic Details
Published in:The American economic review 1971-03, Vol.61 (1), p.210-212
Main Authors: Pressman, Israel, Carol, Arthur
Format: Article
Language:English
Subjects:
Communications
Continuous functions
Investment return rates
Lagrange multipliers
Organizational behavior
Public utilities
Regulation
Revenue
Studies
Theory of constraints
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Summary:A recent article by Akira Takayama discusses an earlier paper by Harvey Averch and Leland L. Johnson on fair rate of return regulation of public utilities. This article discusses several of Takayama's criticisms in addition to showing that the so-called "A-J Effect" cannot be derived from the basic assumptions made by both Averch and Johnson and Takayama.
ISSN:0002-8282
1944-7981