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Testing the regulatory threat hypothesis: Evidence from Sweden

Author

Listed:
  • Petyo Bonev

    (HSG - University of St.Gallen)

  • Matthieu Glachant

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Magnus Söderberg

    (SDU - University of Southern Denmark)

Abstract
This study examines whether threat of stricter regulation influences the pricing behavior of firms. Using data on unregulated Swedish local district heating monopolists, we measure the threat level by the number of customer complaints about prices received by a national board. Exploiting a natural experiment, we find that firms reduce prices when customer complaints increase.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Petyo Bonev & Matthieu Glachant & Magnus Söderberg, 2020. "Testing the regulatory threat hypothesis: Evidence from Sweden," Post-Print hal-03192542, HAL.
    • Handle: RePEc:hal:journl:hal-03192542
    DOI: 10.1016/j.reseneeco.2020.101182
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    Cited by:

    1. Ismail Saglam, 2023. "Incentives of a monopolist for innovation under regulatory threat," Economics of Governance, Springer, vol. 24(1), pages 41-66, March.
    2. Fernqvist, Niklas & Broberg, Sarah & Torén, Johan & Svensson, Inger-Lise, 2023. "District heating as a flexibility service: Challenges in sector coupling for increased solar and wind power production in Sweden," Energy Policy, Elsevier, vol. 172(C).
    3. Bonev, Petyo & Glachant, Matthieu & Söderberg, Magnus, 2022. "Implicit yardstick competition between heating monopolies in urban areas: Theory and evidence from Sweden," Energy Economics, Elsevier, vol. 109(C).
    4. Egüez, Alejandro, 2021. "District heating network ownership and prices: The case of an unregulated natural monopoly," Utilities Policy, Elsevier, vol. 72(C).
    5. Boscan, Luis & Söderberg, Magnus, 2021. "A theoretical and empirical analysis of district heating cost in Denmark," Energy Economics, Elsevier, vol. 99(C).

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    More about this item

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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