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THE DEMAND TO REGULATE FRANCHISE MONOPOLY: EVIDENCE FROM CATV RATE DEREGULATION IN CALIFORNIA
Author(s) -
Hazlett Thomas W.
Publication year - 1991
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1991.tb01271.x
Subject(s) - monopoly , deregulation , franchise , economics , context (archaeology) , microeconomics , cable television , welfare , competition (biology) , service (business) , market economy , business , economy , marketing , telecommunications , paleontology , ecology , computer science , biology
The motivation to price control a franchise monopoly is examined in the context of three distinct economic views of regulatory behavior. These views are tested against data from the California cable television market, over the years 1980–85, during which a subset of monopoly firms converted from regulated to unregulated pricing for basic cable service. As the price constraints of regulation appear to be insignificant in a welfare analysis, the demand for such controls by municipalities is derived from their utility in enforcing vote‐maximizing transfer schemes–a Peltzmanian political outcome with a Stiglerian economic welfare result.