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Kirchner, Christian --- "Regulating Towards What? The Concepts of Competition in Sector-Specific Regulation, the Likelihood of their Realisation and of their Sustainability, and their Relationship to Rendering Public Infrastructure Services" [2006] ELECD 309; in Ullrich, Hanns (ed), "The Evolution of European Competition Law" (Edward Elgar Publishing, 2006)

Book Title: The Evolution of European Competition Law

Editor(s): Ullrich, Hanns

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845427016

Section: Chapter 9

Section Title: Regulating Towards What? The Concepts of Competition in Sector-Specific Regulation, the Likelihood of their Realisation and of their Sustainability, and their Relationship to Rendering Public Infrastructure Services

Author(s): Kirchner, Christian

Number of pages: 15

Extract:

9. Regulating towards what? The
concepts of competition in sector-
specific regulation, the likelihood of
their realisation and of their
sustainability, and their relationship to
rendering public infrastructure
services
Christian Kirchner*

I INTRODUCTION
1 Why Sector-Specific Regulation?
Sector-specific regulation has long been regarded as a welfare enhancing
device in cases of market failure.1 One example of market failure is the so-
called natural monopoly, defined as sub-additivity of the cost function over the
relevant range of output.2 In these cases, so the argument goes, the efficiency


* Professor, Dr. Iur., Dr. rer. pol., LL.M. (Harv.), Humbolt Universität, Berlin.
1 S. F. Breyer, Regulation and Its Reform, Cambridge, Mass, 1982, p. 15; D. W.
Carlton, J. M. Perloff, Modern industrial organization, 3rd edn, Reading, Mass, 2000,
p. 783; A. E. Kahn, The Economics of Regulations: Principles and Institutions, Vol. 1,
Economic Principles, New York et al, 1970, p. 11; D. L. Kaserman, J. W. Mayo,
Government and business. The economics of antitrust and regulation, Orlando, 1995,
pp. 9, 12; R. Richter, E. G. Furubotn, Neue Institutionenökonomik, 3. Aufl., Tübingen,
2004, p. 373; J. G. Sidak, D. F. Spulber, Deregulatory Takings and the Regulatory
Contract ­ The Competitive Transformation of Network Industries in the United States,
Cambridge, England, 1998, p. 20.
2 S. V. Berg, J. Tschirhart, Natural Monopoly Regulation ­ Principles and
Practice, Cambridge, England, 1988, p. 51; W. Kerber, `Wettbewerbspolitik', in
Bender et al., Vahlens Kompendium der Wirtschaftstheorie und Wirtschaftspolitik, Vol.
2, 8th edn, ...