One of the cornerstones of the Telecommunications Act of 1996 (without which the Act probably would not have been passed) is Section 271.1 This Section establishes the criteria under which the Regional Bell Operating Companies (RBOCs)... more
One of the cornerstones of the Telecommunications Act of 1996 (without which the Act probably would not have been passed) is Section 271.1 This Section establishes the criteria under which the Regional Bell Operating Companies (RBOCs) will be allowed to enter (or, more accurately, reenter) the interLATA long-distance market. Specifically, under the 271 provisions, an RBOC’s reintegration within its certificated geographic territory is made contingent upon the satisfaction of four necessary preconditions.3
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While scores of papers have drawn on the basic insights of the early founders of the economic theory of regulation, the ability to cogently present the general form of the theory in a readily accessible graphical format has only recently... more
While scores of papers have drawn on the basic insights of the early founders of the economic theory of regulation, the ability to cogently present the general form of the theory in a readily accessible graphical format has only recently emerged. While providing a promising approach for illustrating and analyzing regulatory (and deregulatory) outcomes, however, the analysis presented to this point appears to require the derivation of several different graphs. The result is that, while stemming from a single paradigmatic framework, the graphical approach fails thus far to offer a single unified basis for illustrating the general economic theory of regulation. In this paper, we seek to fill this lacuna by providing a simple, yet powerful, unifying graphical construct for presenting the myriad implications of that theory. (JEL D72, L51)
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ABSTRACT Although many authors have drawn on the basic insights of the early founders of the economic theory of regulation, the ability to cogently present the general form of the theory in a readily accessible graphical format has only... more
ABSTRACT Although many authors have drawn on the basic insights of the early founders of the economic theory of regulation, the ability to cogently present the general form of the theory in a readily accessible graphical format has only recently emerged. Although providing a promising approach for illustrating and analyzing regulatory and deregulatory outcomes, the analysis presented to this point appears to require the derivation of several graphs. The result is that, although stemming from a single paradigmatic framework, the graphical approach fails to offer a single unified basis for illustrating the general economic theory of regulation. The authors seek to fill this lacuna by providing a simple yet powerful unifying graphical construct for presenting the myriad implications of that theory.
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The assumption that agents engage in maximizing behavior, while ubiquitous in economic theory, differs from the assumption that agents are willing to rely on the maximizing behavior of others. This paper offers an empirical examination of... more
The assumption that agents engage in maximizing behavior, while ubiquitous in economic theory, differs from the assumption that agents are willing to rely on the maximizing behavior of others. This paper offers an empirical examination of this distinction using experimental methods. Utilizing a series of experimental treatments based on a simple, two player extensive form game of perfect information, we find strong evidence that apparently rational people are often unwilling to rely on the self-interested behavior of others, despite the observed near universality of maximizing play.
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We study the implications of extending public-insurance coverage to an existing medical market in Salop's spatial model of imperfect competition. In this setup a public insurer sets a price to medical providers, which must maintain... more
We study the implications of extending public-insurance coverage to an existing medical market in Salop's spatial model of imperfect competition. In this setup a public insurer sets a price to medical providers, which must maintain their reservation pro…t from selling on the spot market directly to consumers. We show that the public insurer can manipulate this reservation pro…t by setting the coinsurance rate, and that setting the coinsurance rate properly yields the market …rst best product diversi…cation. The results survive generalizations including moral hazard and incomplete coverage. When adding quality choice to the analysis, a minimum quality standard that is combined with a proper coinsurance rate can still support market e¢ ciency. JEL Classi…cation: : I-13, I-18, K-35
We study the implications of extending public-insurance coverage over differentiated medical products of the same therapeutic group to market outcomes. The public insurer can set the reimbursement level for medical providers and the... more
We study the implications of extending public-insurance coverage over differentiated medical products of the same therapeutic group to market outcomes. The public insurer can set the reimbursement level for medical providers and the copayment for the insured for medical care provided under the policy coverage, but cannot directly control providers’ spot sales (outside of insurance) price. In this setup, the price offered by the public insurer to medical providers must maintain their reservation profit from selling on the spot market directly to consumers. We show that the public insurer can manipulate this reservation profit by setting the copayment rate, and thereby promote market welfare while increasing consumers’ surplus due to lower medical prices and lower market entry. The results survive generalizations including moral hazard and incomplete insurance coverage.
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ABSTRACT To effect an IPO in modern times the private company must seek permission from the Securities and Exchange Commission (SEC). In administering the Securities Act of 1933, the SEC requires the selling company to publicly disclose... more
ABSTRACT To effect an IPO in modern times the private company must seek permission from the Securities and Exchange Commission (SEC). In administering the Securities Act of 1933, the SEC requires the selling company to publicly disclose pertinent facts about the firm’s business, current operations, management, primary shareholders, and financial condition. Before the regulation and process of a current-day IPO is considered, a brief review of early IPOs may be appropriate.
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Regulation of the health care sector of the US economy is pervasive. Virtually all industries contained in this sector are subjected to myriad government controls over one or more dimensions of performance-price, output, investment,... more
Regulation of the health care sector of the US economy is pervasive. Virtually all industries contained in this sector are subjected to myriad government controls over one or more dimensions of performance-price, output, investment, entry, and quality [7; 8]. It is our general thesis that, ...
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Research Interests: Economics, Telecommunications, Communications law, Administrative Law, Mobile Communications, and 12 moreSocial Science Research Network, Legislation, Spectrum Management, Internet Access, Spectrum Policy, Wireless Broadband, Spectrum, Service Provider, Mobile Broadband, Communications, Spectrum Auctions, and Spectrum Allocation
Research Interests: Business, Law, Internet Law, Law and Economics, Torts, and 4 morePhoenix, Privacy Law, Computer Law, and Liability
Flow through refers to the effect of a change in incremental production costs on the prices of goods or services, and is a topic of great interest to regulators and others. This article provides a framework for both analyzing flow... more
Flow through refers to the effect of a change in incremental production costs on the prices of goods or services, and is a topic of great interest to regulators and others. This article provides a framework for both analyzing flow through, and for evaluating whether or not flow through, properly defined, occurs in the long distance telecommunications industry. We focus
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Deviations between closed-end investment fund share prices and underlying net asset values represent a historically important anomaly requiring theoretical explanation. In this article, we provide evidence that the processes generating... more
Deviations between closed-end investment fund share prices and underlying net asset values represent a historically important anomaly requiring theoretical explanation. In this article, we provide evidence that the processes generating prices and NAVs differ among fund types, implying that explanations of mispricing will necessarily be somewhat parochial. Using a multivariate GARCH model for estimated common factors, we empirically examine discounts of both equity and bond funds, and we find an important asymmetry between them. In particular, we show a structural break in this relationship for bond funds after the Lehman bankruptcy and suggest an explanation based on persistence in NAVs arising from market illiquidity.
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This article examines the role of resale entry in achieving competition in local exchange telecommunications markets in the US under the Telecommunications Act of 1996. Contrary to the claims of many incumbent local exchange providers, we... more
This article examines the role of resale entry in achieving competition in local exchange telecommunications markets in the US under the Telecommunications Act of 1996. Contrary to the claims of many incumbent local exchange providers, we argue that: (1) resale entry produces direct competitive benefits; (2) resale entry will not reduce incumbent incentives to invest in the local network; and
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In a recent paper in this Journal, Possai and Goetz [10] (PG) offer an explanation of why a hospi-tal might choose to provide a service (organ transplants) or continue to provide a service that, on its own merits, may appear to be... more
In a recent paper in this Journal, Possai and Goetz [10] (PG) offer an explanation of why a hospi-tal might choose to provide a service (organ transplants) or continue to provide a service that, on its own merits, may appear to be unprofitable. Their explanation is based upon ...