The Peltzman Model of Regulatory Capture

  Let the political support function (M) be described by: M = M(p, Π) Where p is price established for the regulated service (e.g., electricity) by the regulatory authority (e.g., the New York Public Service Commission)  and Π  is the level of profit earned by the regulated firm (e.g., New York Edison) at that level. M falls with p … More The Peltzman Model of Regulatory Capture