This monograph was the winner of the Nestlé Prize 2000 for the best Austrian PhD-Thesis in the
Social Sciences. As it is not possible to introduce competition into every single market there
will still remain monopolies - like in the telecom or energy sector - which have to be put
under public regulation. This book offers a look into the latest developments in regulatory
practice and theory. What shall a regulator do when she wants to give incentives for cost
minimization to the regulated firm and at the same time efficient prices to the consumers?
After a comparison of different real world regulatory regimes a simple theoretical model is
used to assess the real world approaches and design optimal policies. The theoretical recipes
are presented in a way which should be accessible to advanced students and real world
regulators.
