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Leading the authorities to resent efficiency-improving regulation. BETTER ECONOMIC REGULATION: THE ROLE OF THE REGULATOR – ¤ OECD/ITF 2011 SUMMARY OF DISCUSSIONS – 31 8. Note that discrimination in the sense employed here does not include differential pricing of services according the willingness of the end-use market to pay, or Ramsey pricing, which can present the most efficient way to recover the costs of fixed assets. 9. This includes the decision not to make technical experience in the rail industry a condition for companies or consortia bidding for the infrastructure assets.
Elsewhere, Australia and New Zealand have privatised some of their airports as well. Australia initially went through a phase of price-cap regulation and changed later to a monitoring system. New Zealand abolished ex ante regulation, but later re-regulated airports. Competition among airports, which hardly existed twenty years ago, developed due to the privatisation and liberalization of downstream markets. A consequence of this was the influence on the scope and method of regulation. Again, these challenges are best observed in the UK.
1977; Forsyth, 1997). Market failure can be corrected by a variety of different governance models, particularly by state ownership or by regulated, private monopolies. For the latter model the question arises how to encourage private investment in a regulated framework? Privatisation of such an industry is not straightforward. A major problem is how to write long-term contracts for fixed investments, which have value only in a specific exchange relation. Asymmetric information makes it infeasible to write complete long-term contracts that cover all contingencies.