Based on a Lasperyres-type price cap,with game theory as a analyze method,this paper has studies the strategic pricing behavior of the regulated monopoly,showing that as an efficient incentive mechanism,price cap regulation can lead to a socially optimal outcome in the long run.

The two commonly used methods for regulation in power market, namely the rate-of-return regulation of the US and the price-cap regulation of Britain, as well as the emerging measure of special operation right auction (SORA) were introduced.

We analyzed the theory origin,main features and limitation of rate-of-return regulation in USA and price-cap regulation in UK in this thesis, and compared their difference and similarity.

Within the last 20 years,price-cap regulation has largely replaced the rate-of-return regulation because of its potential to generate more efficient pricing structures and strong incentives for cost reduction.

Based on the comparison of the income rale regu-lation and price cap regulation, the influence factors, making rules and principles of price cap regulation in preliminary stage of electricity market are discussed.

This paper studies two regulatory means for encouraging technical innovation of enterprises-price cap regulation and optimal regulatory mechanism.

Based on the low social welfare problem of successive monopolistic upstream and downstream firms, the authors analyzed the profits of these firms, consumer surplus and social welfare while these firms were under price-cap regulation respectively.

The paper introduces the developing history of telecom charge controlling system in America and Britain;it explains their current charge controlling systems---price upper limit,and finds out the disadvantages in our current charge controlling system in order to have improvements.