Interesses eleitorais e flutuações de preços em mercados regulados
By: PAIVA, Claudio A. C
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ArticlePublisher: São Paulo : Nobel, out./dez. 1994Revista de Economia Política = Brazilian Journal of Political Economy 14, 4, p. 31-40Abstract: This paper builds on the theory of regulation developed by Stigler and Peltzman. According to these authors, a regulator chooses his/her strategy seeking to maximize political support from consumers and producers, viewing welfare and efficiency as secondary issues. This process determines a regulated price that is between the competitive and monopolistic levels. Our paper develops a modified version of Peltzmans model by considering the idea that the regulators behavior might change with the proximity of elections. The addition of a timing dimension to the problem and its implication for consumers, producers and the regulators behavior suggest that the optimal strategy now implies in a price cycle in regulated industries. The regulator has incentives to impose higher prices when elections are relatively far ahead and lower (real) prices in periods that immediately precede an important election. We show that the Brazilian gasoline market between 1969-1984 supports our results
This paper builds on the theory of regulation developed by Stigler and Peltzman. According to these authors, a regulator chooses his/her strategy seeking to maximize political support from consumers and producers, viewing welfare and efficiency as secondary issues. This process determines a regulated price that is between the competitive and monopolistic levels. Our paper develops a modified version of Peltzmans model by considering the idea that the regulators behavior might change with the proximity of elections. The addition of a timing dimension to the problem and its implication for consumers, producers and the regulators behavior suggest that the optimal strategy now implies in a price cycle in regulated industries. The regulator has incentives to impose higher prices when elections are relatively far ahead and lower (real) prices in periods that immediately precede an important election. We show that the Brazilian gasoline market between 1969-1984 supports our results
Revista de Economia Política 1994
v. 14, n. 4(56)
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