Wj. Baumol et Rd. Willig, Competitive rail regulation rules - Should price ceilings constrain final products or inputs?, J TRANSP EC, 33, 1999, pp. 43-53
There is no prospect at present that railroad rates in the United States wi
ll be deregulated and left entirely to the control of market forces. Becaus
e of this there is a need for defensible regulatory rules to be adopted. Th
e authors consider the US regulatory rules of constrained market pricing wi
th particular reference to the pricing of final products (namely, origin to
destination rail transport) and the pricing of a bottleneck. They conclude
that economic efficiency, and through it the public interest, is served mo
st effectively by rules that impose the: same behaviour that market forces
would impose on firms if those forces were present.