Deregulation with consensus

DOI10.1007/S00199-007-0221-ZMaRDI QIDQ883102zbMATH OpenOpenAlexFDO

Authors Sandro Brusco, Hugo A. Hopenhayn

Publication date 31 May 2007

Published in Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1007/s00199-007-0221-z

zbMATH Keywords

efficiency

Mathematics Subject Classification ID

Production theory, theory of the firm (91B38) Economic growth models (91B62)

Review text

In this paper the authors analyze the problem of eliminating an inefficient regulation that keeps prices artificially high while obtaining consensus from all agents involved. The planner designs an optimal mechanism to maximize a weighted sum of incumbent finins profits and consumer surplus. The firsm have different cost functions and only the statistical distribution of costs is known to the planner. Agents are infinitely lived and the planner can choose time paths for subsidies. The authors consider a mechanism with balanced budget, so that transfers must be financed by taxes on the consumers. In order to simplify the discussion they assume that the inefficient regulation to be eliminated is a protectionist tariff, although is should be clear that the results apply in general to all inefficient regulations.

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Cites work

• Bargaining under Asymmetric Information
• Economic Reform and Dynamic Political Constraints
• Foundations of dynamic monopoly and the Coase conjecture
• scientific article; zbMATH DE number 3912096 (Why is no real title available?)
• scientific article; zbMATH DE number 3992265 (Why is no real title available?)
• Intertemporal Price Discrimination
• Minimizing a Submodular Function on a Lattice
• Optimal Auction Design
• Reputation in Bargaining and Durable Goods Monopoly

Cited in

(8)

• On deregulating food prices
• What determines the power of a regulatory regime?
• A Little Paradox in the Design of Regulatory Mechanisms
• Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets
• Gridlock and inefficient policy instruments
• Edward C. Prescott's contributions to economics: guest editors' introduction
• Government interventions in a dynamic market with adverse selection
• Regulation through a revenue contest

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