Utility Regulation and Risk Allocation: The Roles of Marginal Cost Pricing and Futures Markets.
The paper assesses the welfare effects of different ways of allocating input price risk between a regulated utility, consumers and speculators in a futures market. A risk-averse utility setting a fixed retail price requires a price that exceeds expected marginal cost, unless an efficient futures mar...
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| Format: | Working paper |
| Language: | English |
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Department of Economics (University of Oxford)
2002
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