This paper analyzes some policies implemented by a social planner seeking to control regional monopoly power in the natural gas industry when, because of liberalization, he sees the set of available control instruments progressively reduced. We assess the extent to which transfers, transport capacity, and price are substitutes or complements when fighting market power. We characterize the cases where loss of control instruments results in "over" or "under" sizing of the transport network.

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We analyze the optimal regulation of a utility monopoly that has a binding universal service obligation. In this context we derive the optimal two-part tariff the regulator should set under three different regulatory rules: no flexibility, partial flexibility (the monopolist can offer alternative plans, but these must be available to all customers), and total flexibility (only the regulated plan must be available to all customers).

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Double marginalization is pervasive in vertical relationships between independent firms that possess market power. This paper analyzes which types of product such firms will provide compared to a vertically integrated firm. In the case of downstream investment, disintegrated firms unambiguously provide higher quality than an integrated firm, while quality may be higher or lower in the case of upstream investment, depending on preferences and technology.

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We consider a bottleneck monopoly whose access charge is regulated above marginal cost and provides access to an oligopoly of downstream firms. We show that a vertical merger will not decrease welfare in most cases.

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Anticompetitive behaviour is one of the justifications for regulatory intervention in the market by CADE. Analyzing the advantages of Commitment to Cease Practice one can concludes that it may be an ex-ante incentive to acting anticompetitively. We analyze this problem in the framework of incomplete information. Relevant results are: to punish with mechanisms that go against reputation is inefficient, and applying high fines is fundamental.

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This paper analyzes the effect of structural reform in the efficiency of a regulated industry. The government decides whether to privatize a public firm by targeting a core of institutional investors or a pool of dispersed shareholders. I show the conditions under which concentrated ownership leads to overinvestment thus raising the tax burden upon the electorate. This result is robust to hidden knowledge and moral hazard.

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