Stewart C. Myers

William B. Tye

A. Lawrence Kolbe

It is common to assert that utility investors are compensated in the allowed rate of return for the risk of large disallowances, such as arise for investments found imprudent or not `used and useful'. However, this book develops a new theory of asymmetric regulatory risk that shows that infallible estimates of the cost of capital are sure to provide downward-biased estimates of the necessary allowed rates of return in the presence of such regulatory risks. The book uses the new theory of regulatory risk to understand recent developments in the risk of natural gas pipelines and other regulated industries.

Regulatory Risk: Economic Principles and Applications to Natural Gas Pipelines and Other Industries

Collective ratemaking in the motor carrier industry is undoubtedly one of the most poorly understood issues in the literature on economic regulation. While strongly held opinions are commonplace, real knowledge of the collective ratemaking process and of how trucking tariffs are constructed is scarce. William Tye closes this gap in our knowledge with the most comprehensive study yet of the effects of the Motor Carrier Act of 1980 on competition on the trucking industry.

The Case of Motor Carrier Deregulaton and Collective Ratemaking

Encouraging Cooperation Among Competitors

This volume addresses specific economic problems associated with the deregulation process. Based on the author's large body of work on railroad deregulation, it elucidates principles that can be applied to any major industry entering the competitive marketplace--particularly telecommunications and other utilities, including gas and electric. Tye has updated and revised previously published works and structured them into an integrated framework to address major subject areas. Each section addresses a particular issue and can be read on a stand-alone basis. By providing appropriate economic models and rules for successful transition, this work is designed to encourage a successful transition to deregulation.

William B. Tye

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