Incumbent and entrant response to regulated competition: Signalling with accounting costs and market prices

Jesús Otero; Catherine Waddams Price

doi:10.1016/S0148-6195(00)00053-9

Incumbent and entrant response to regulated competition: Signalling with accounting costs and market prices

Jesús Otero
, Catherine Waddams Price

Research output: Contribution to Journal › Research Article › peer-review

6 Scopus citations

Abstract

Relative prices charged by incumbents have become a strategic issue as competition is introduced into regulated markets which were previously served by a monopoly supplier. We report on the behavior of the incumbent and entrants in the residential UK gas market, where the regulator has made several investigations into whether the incumbent’s relative prices constitute undue discrimination. We identify the regulator’s policy, the strategic use of cost allocation by both the regulator and the incumbent, and the costs implied by entrants’ prices. We deduce that the entrants’ behavior provides support for the incumbent’s cost allocation arguments rather than those of the regulator.

Translated title of the contribution	Respuesta de los titulares y entrantes a la competencia regulada: señalización con costos contables y precios de mercado
Original language	English (US)
Pages (from-to)	209 - 223
Number of pages	15
Journal	Journal of Economics and Business
Volume	53
Issue number	2-3
DOIs	https://doi.org/10.1016/S0148-6195(00)00053-9
State	Published - 2001

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 12 Responsible Consumption and Production

All Science Journal Classification (ASJC) codes

General Business, Management and Accounting
Economics and Econometrics

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10.1016/S0148-6195(00)00053-9

Cite this

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title = "Incumbent and entrant response to regulated competition: Signalling with accounting costs and market prices",

abstract = "Relative prices charged by incumbents have become a strategic issue as competition is introduced into regulated markets which were previously served by a monopoly supplier. We report on the behavior of the incumbent and entrants in the residential UK gas market, where the regulator has made several investigations into whether the incumbent{\textquoteright}s relative prices constitute undue discrimination. We identify the regulator{\textquoteright}s policy, the strategic use of cost allocation by both the regulator and the incumbent, and the costs implied by entrants{\textquoteright} prices. We deduce that the entrants{\textquoteright} behavior provides support for the incumbent{\textquoteright}s cost allocation arguments rather than those of the regulator.",

author = "Jes{\'u}s Otero and Price, \{Catherine Waddams\}",

note = "Funding Information: We are grateful for financial support for this research from the Gas Consumers Council, the Energy Action Grants Agency Charitable Trust, British Gas Trading and the Leverhulme Trust (award number F215/AX). We should like to thank colleagues at the Centre for Management under Regulation and two anonymous referees of this journal for their helpful comments, and most especially Lin Fitzgerald for her very helpful suggestions. All responsibility for the analysis and interpretation of data reported here rests with the authors. ",

year = "2001",

doi = "10.1016/S0148-6195(00)00053-9",

language = "English (US)",

volume = "53",

pages = "209 -- 223 ",

journal = "Journal of Economics and Business",

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TY - JOUR

T1 - Incumbent and entrant response to regulated competition: Signalling with accounting costs and market prices

AU - Otero, Jesús

AU - Price, Catherine Waddams

N1 - Funding Information: We are grateful for financial support for this research from the Gas Consumers Council, the Energy Action Grants Agency Charitable Trust, British Gas Trading and the Leverhulme Trust (award number F215/AX). We should like to thank colleagues at the Centre for Management under Regulation and two anonymous referees of this journal for their helpful comments, and most especially Lin Fitzgerald for her very helpful suggestions. All responsibility for the analysis and interpretation of data reported here rests with the authors.

PY - 2001

Y1 - 2001

N2 - Relative prices charged by incumbents have become a strategic issue as competition is introduced into regulated markets which were previously served by a monopoly supplier. We report on the behavior of the incumbent and entrants in the residential UK gas market, where the regulator has made several investigations into whether the incumbent’s relative prices constitute undue discrimination. We identify the regulator’s policy, the strategic use of cost allocation by both the regulator and the incumbent, and the costs implied by entrants’ prices. We deduce that the entrants’ behavior provides support for the incumbent’s cost allocation arguments rather than those of the regulator.

AB - Relative prices charged by incumbents have become a strategic issue as competition is introduced into regulated markets which were previously served by a monopoly supplier. We report on the behavior of the incumbent and entrants in the residential UK gas market, where the regulator has made several investigations into whether the incumbent’s relative prices constitute undue discrimination. We identify the regulator’s policy, the strategic use of cost allocation by both the regulator and the incumbent, and the costs implied by entrants’ prices. We deduce that the entrants’ behavior provides support for the incumbent’s cost allocation arguments rather than those of the regulator.

UR - https://www.scopus.com/pages/publications/0004410318

UR - https://www.scopus.com/pages/publications/0004410318#tab=citedBy

U2 - 10.1016/S0148-6195(00)00053-9

DO - 10.1016/S0148-6195(00)00053-9

M3 - Research Article

AN - SCOPUS:0004410318

SN - 0148-6195

VL - 53

SP - 209

EP - 223

JO - Journal of Economics and Business

JF - Journal of Economics and Business

IS - 2-3

ER -

Incumbent and entrant response to regulated competition: Signalling with accounting costs and market prices

Abstract

UN SDGs

All Science Journal Classification (ASJC) codes

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