6 setting rates in regulated industries, 205-209 natural monopoly, 119-120 primary jurisdiction doctrine, 303-304 network economic effects, 120-122 primary markets, entry to, 145-146 ruinous/managed competition, 125-126 Prim's algorithm, 44, 44f vertical exclusion, 122-125 principle of network capacity, 160 rationales for regulatory instruments, 135-151 priority pricing under asymmetric information, 93-94 natural monopoly, 135-138 Prodigy, 405 network economic effects, 138-143 production functions of networks, 50, 60f vertical exclusion, 143-151 for engineering, 51-52 regulatory arbitrage, 184-185 for a multi-output network, 58, 60f regulatory policy, fundamental shift in, 2-3 network production function, 53 reliability pricing, under asymmetric information, for a single-output network, 53-58 90-93 natural gas transmission, 53-55 reliability schedule, 91, 92f telecommications, 55-58 shadow price of capacity, 91 production possiblility frontier (PPF), 59, 60f virtual demand function, 90-91 proprietary customer premises equipment, 381 reliability schedule, 91, 92f Index rental companies, 32 service layers, 167, 167f rent control, 218-220 shadow price of capacity, 91 replacement cost Shapiro, Carl, 113n25, 140, 140n24, 362n36, 362n37, direct costs and, 206 389n21 market value under Takings Clause, 225 Sharfman, Isaiah, 234n3 proxy price and, 127, 156, 197, 205-206 Sharkey, William W., 5 as second-best solution, 197 Shelanski, Howard A., 312n93 resale price maintenance, 289n19 Shepard's citator system, 389 retail access, 7, 15-16, 30-33 Sherman Act, 283 under antitrust law, 315-319 short-run cost function, 72 capacity and configuration effects, 160-163 short-run incremental cost, 75 congestion effects and, 105-106 short- vs. long-run equilibrium, 387, 388f cost-of-service approach, 173 shoulder rates, 416 economic effects of mandated, 153-154 Sidak, J. Gregory, 216n10 excess demand, 162f ski facilities, essential facilities doctrine and, expand demand, 161, 162f 287-288 increase demand, 161-162 Smith, Adam, 190n1, 20