Journal of Regulatory Economics

, Volume 42, Issue 2, pp 115–134

Designing optimal gain sharing plans to promote energy conservation

Original Article

DOI: 10.1007/s11149-012-9194-3

Cite this article as:
Chu, L.Y. & Sappington, D.E.M. J Regul Econ (2012) 42: 115. doi:10.1007/s11149-012-9194-3


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.


Energy conservation Gain sharing Asymmetric information 

JEL Classification

D82 L51 Q38 

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Department of Information and Operations Management, Marshall School of BusinessUniversity of Southern CaliforniaLos AngelesUSA
  2. 2.Department of Economics, Warrington College of BusinessUniversity of FloridaGainesvilleUSA

Personalised recommendations