An Energy Industry Case Study In Expropriation Risk

By Andrés Chambouleyron (April 11, 2024, 5:26 PM EDT) -- Traditional damage theory looks at ex ante sunk costs[1] as an explanation for how vulnerable to expropriation an industry may be. The larger the sunk costs (i.e., highly specific assets such as gas and electricity networks), the higher the risk of ex post opportunistic behavior by the government....

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