Designing optimal gain sharing plans to promote energy conservation
First Online: 06 June 2012 Received: 26 February 2012 Accepted: 09 May 2012 DOI:
Cite this article as: Chu, L.Y. & Sappington, D.E.M. J Regul Econ (2012) 42: 115. doi:10.1007/s11149-012-9194-3 Abstract
We analyze the optimal design of gain sharing plans to promote energy conservation. We show how the optimal plan varies as industry conditions and the regulator’s information change. We demonstrate the importance of allowing the energy supplier a choice among plans, some of which offer the prospect of both pronounced financial gains for superior performance and substantial losses for inferior performance.
Keywords Energy conservation Gain sharing Asymmetric information References
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