“Regulated firms and industries operate within the
administrative process just as they operate within the
market; the regulatory process provides opportunities
for strategic behavior in pursuit of economic objectives.
Strategic use of the process does not necessarily
constitute abuse of that process.”Bruce Owen and Ronald Braeutigam, The Regulation Game, 1978Marginal-Cost Pricing Under Economies of Scale



Regulation has traditionally been viewed as correcting failures in the market mechanism. However, scholarly work preceding the recent deregulation movement highlighted inefficiencies introduced by the regulatory process. Experts on regulation now examine both the intended and unintended consequences of government intervention. Regulatory issues requiring economic analysis arise daily in the context of legislative and rule-making activities, the enforcement of regulations, antitrust cases, and rate proceedings.Antitrust in Regulated IndustriesAnalysis of economic behavior in regulated industries poses some of the most challenging problems in economics. Regulation sometimes produces incentives for anticompetitive activities that would not be undertaken by unregulated firms.


EI economists have contributed to the professional literature on regulation and regulated industries. While serving at federal agencies, they have participated in the formulation and implementation of regulatory policies. EI economists study the effects of regulations, participate in writing comments in response to proposed rule-making, and on many occasions testify concerning regulatory issues.

EI economists have analyzed matters involving regulation or deregulation in many different areas, such as:
arrowsub   Telecommunications—wireline and mobile telephone services, satellite services, telecommunications equipment, electronic information services
arrowsub   Mass Media—television, television program supply, cable television, cable programming, radio, magazines, newspapers
arrowsub   Health Care—hospitals, provider-service organizations, physician networks, health insurance, nursing homes
arrowsub   Transportation—railroads, trucking, airlines, computer reservation systems, airports, pipelines, taxicabs
arrowsub   Electric Power—delivered bulk power, transmission, retail electricity
arrowsub   Natural Gas and Petroleum—market-based rates, incentive regulation
arrowsub   Services—insurance, postal services, real estate brokerage, computer reservation services
arrowsub   Banking—banks, thrifts, automatic teller machine networks, credit cards
arrowsub   Food and Drugs—alcoholic beverages, tobacco, pharmaceuticals, fruits and vegetables
arrowsub   Environment—natural resource damages, Superfund clean-ups, regulatory compliance, CAFE standards
arrowsub   International Trade—dumping, countervailing duties, quotas, gray markets, services, standards
arrowsub   Consumer Protection—deceptive advertising, disclosure, credit practices, product liability
arrowsub   Financial Markets—program trading, intermarket regulation, off-exchange trading, insider trading

If you are interested in learning more about the transportation sector consulting services offered by Economists Incorporated, please contact a member of our management team: David Argue, Jonathan Walker, Matthew Wright.