Introduction -- I. Price and rate-of-return regulation -- 1. Cost-reimbursement rules -- 2. Pricing by a single-product firm with and without budget balance -- 3. Pricing and incentives in a multiproduct firm -- 4. Regulation of quality -- II. Product market competition -- 5. Competitive Ramsey formulas and access pricing -- 6. Bypass and cream skimming -- III. Bidding for natural monopoly -- 7. Auctioning incentive contracts -- 8. Repeated auctions of incentive contractsa, investment, and bidding parity -- IV. The dynamics of regulation -- 9. Dynamics without commitment and the ratchet effect -- 10. Commitment and renegotiation -- V. The politics of regulation -- 11. Regulatory capture -- 12. Cost padding, auditing, and collusion -- 13. Cartelization by regulation -- 14. Auction design and favoritism -- IV. Reglatory institutions -- 15. Regulatory instruments, hearings, and interest group monitoring -- 16. Commitment and political accountability -- 16. Privatization and incentives.