Study On Price-Regulation Based On Successive Monopolistic Upstream And Downstream Firms

Some developed countries have made great progress in price-regulation theory since 1970s, which directly resulted in price-regulation reform of natural monopoly such as telecommunications industry, electricity industry, water industry and railway industry in USA, England and Japan. These countries gradually improved the economic efficiency of natural monopoly, and the consumers benefited from the lower price. The reform and open policy has been carrying out about 25 years in China, and the government has gradually changed the reform model from the planned economy to market economy. The government don't set down the price in most of competitive industry at all, and the consumers benefit more from the competitive commodity market. The monopolistic firms especially the natural monopoly such as telecommunications industry, electricity industry, water industry and railway industry, have made some progress, but the ultimate effect isn't good anyway. If the upstream and the downstream are all monopoly, the efficiency will be worse, and the price will be higher. The dissertation analyses the pricing behavior of these firms under price-cap regulation and rate-of-return regulation when it isn't suitable to integrate vertically because of transaction cost, and the author analyses the profits of these firms, consumer surplus and social welfare while the upstream firm or the downstream firm is under regulation. Meanwhile, the author compares the regulated social welfare with the unregulated social welfare and incorporated social welfare. The dissertation consists of 8 parts, the main content and conclusion follows as: The first part gives an overall review of the latest researches on monopoly and natural monopoly and successive monopolistic upstream and downstream. Because the price-regulation can resolve the distortion of natural monopoly preferably, the author introduces the regulation theory of Harvard School, Chicago School, Austria School and domestic scholar. The second part analyses the game of the regulator and the regulated firm under peculiar relationship of the government and the enterprise nowadays. The author draws a conclusion that In order to maximize the utilization, the regulator will make a higher price no matter how the regulated firm bribes the regulator or not. Meanwhile, this part already introduces the capture theory of regulation of Stigler and Peltzman and Becker, and analyses the relationship among the regulator and the regulated firm and theconsumers. At last, the author gives some advice on how to keep away capture of regulation. The third part of the dissertation simply introduces the principle of Ramsey pricing and two-part tariffs, also introduces the principle of rate-of-return regulation. The author analyses the cost-efficiency of rate-of-return regulation under technology innovation. Meanwhile, this part introduces the principle and model of price-cap regulation, and respectively analyses the cost-efficiency when the regulated price-cap and the technology innovation are irrespective or relevant. The fourth part introduces the pricing behavior of successive monopolistic upstream and downstream firm, and introduces Spengler's means to resolve Double Marginalization problem. Meanwhile, this part analyses the consumer surplus and social welfare when the monopolistic upstream firm or monopolistic downstream firm is under price-cap regulation respectively. The fifth part analyses the rate-of-return regulation models of USA and Hongkong comparatively. The author thinks that reform of property right and government- enterprise relationship is very important for Chinese natural monopoly. Then, the author gives some advice on how to reform Chinese natural monopoly. Meanwhile, this part analyses the consumer surplus and social welfare when the monopolistic upstream firm is under rate-of-return regulation. The sixth part of this dissertation introduces the several development stage of China Civil Aviation(CCA) and the latest 20-year development status. This part analyses the industrial...