Regulating a monopolist with limited funds (Q818524)
From MaRDI portal
scientific article
Language | Label | Description | Also known as |
---|---|---|---|
English | Regulating a monopolist with limited funds |
scientific article |
Statements
Regulating a monopolist with limited funds (English)
0 references
21 March 2006
0 references
The authors analyze the problem of regulating a monopolist with unknown cost when the regulator has limited funds. When the funds are limited, the regulator has two instruments to limit the transfer: bunching the more efficient types and under-production. The optimal regulatory mechanism prescribes that the monopolist supplies a good of lower quantity and that the more efficient types produce the same quantity. These two distortions reduce the information rent and the quantity produced by the more efficient types.
0 references
Regulation
0 references
Asymmetric information
0 references
Limited funds.
0 references