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Consumer Awareness as a Complement to Regulation

2018-11 IFN Newsletter No. 2, 2018

Author(s): Erik Lundin

Consumer Awareness as a Complement to Regulation Erik Lundin

Network industries, such as electricity and water distribution, are typically seen to require regulation to prevent excessive pricing. But new research shows how consumer awareness can also create competitive pressure among local network owners.

Using a unique data set on publicly-owned water utilities in Sweden, the study finds that utilities set prices similar to those in neighboring networks despite the absence of alternative suppliers for consumers. Moreover, this “price mimicking” behavior is more pronounced in municipalities where local policy makers run a higher risk of being voted out of office.


Reference:

Lundin, Erik (2018; "Consumer Awareness as a Complement to Regulation". IFN Newsletter No. 2, 2018.

Erik Lundin

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Mob: +46 70 752 5847
erik.lundin@ifn.se

Interdisciplinary European Studies

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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