cost control and rent extraction, Management Theories

Think of a state where the regulator is uncertain as to the true cost of the regulated firm. Also, the firm (the firm's management) can work harder or less hard to control costs; if it doesn't work hard its costs will be higher. There is a subjective cost to work hard to keep costs down, e.g., due to  management will have to fire a lot of staff and it will have to introduce new work routines that will not be popular. This is a real & substantial cost, but it doesn't show up in the accounts, it cannot be verified and thus it cannot be compensated explicitly by the regulator.

 

a) Discuss the trade-off the regulator has to make among cost control and rent extraction. What "family" of regulatory methods will achieve cost control, what "family" of methods will achieve rent extraction? Can the two methods be combined?

b) Under a consumer-welfare standard, try to construct two instances where one of the 2 methods is preferred in one example and the other in the other example. Try to link your two examples to real-world situations!

 

 

Posted Date: 3/19/2013 4:10:09 AM | Location : United States







Related Discussions:- cost control and rent extraction, Assignment Help, Ask Question on cost control and rent extraction, Get Answer, Expert's Help, cost control and rent extraction Discussions

Write discussion on cost control and rent extraction
Your posts are moderated
Related Questions
Cost of Debt: The interest rate or rates charged to organizations by its lenders for use of the capital. Cost of Equity: The rate of return needs by organizations

Explain the difference between formal and informal team and describe two different organizational structures.

explain Henry assael model

draw the cross section of a plant cell

CONTRIBUTIONS OF FREDERICK WINSLOW TAYLOR IN SCIENTIFIC MANAGEMENT THEORY F.W .Taylor is a most important figure in the history of management thoughts. He is known as the foun

Advantages: 1.Many social events are such that they have already occurred and cannot be repeated or replicated. Causes behind many events cannot be created or reproduced. Hence


Should benching be a matter of concern a Delta?

WRITE AN ESSAY DESCRIBING THE DEVELOPEMENT OF HRM AS A SEPERATE, BUT INTERGRATED, ORGANISATION MANAGEMENT DISCIPLINES AND DISCUSSINGNITS CONTRIBUTION TO ORGANISATION STRATEGY AND P