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Natural Monopoly and Yardstick Competition
Author(s) -
Shew William B.
Publication year - 2000
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/1468-0270.00255
Subject(s) - yardstick , natural monopoly , competition (biology) , monopoly , industrial organization , quality (philosophy) , economics , work (physics) , microeconomics , business , engineering , mathematics , ecology , mechanical engineering , philosophy , geometry , epistemology , biology
There is a renaissance of interest in yardstick competition as an aid to regulators. It can work well when the only source of inter‐firm cost differences is efficiency. However, when cost differences arise from other factors, yardstick competition must rely on statistical analyses which have so far not been very successful in determining the effect on distribution cost of the cost environment, scale and service quality.