Please use this identifier to cite or link to this item:
Title: Self-regulation under asymmetric cost information
Authors: Sağlam, İsmail
Keywords: Monopoly
Asymmetric information
Issue Date: 2021
Publisher: Springernature
Abstract: In this paper, we study how a monopolistic firm with unknown costs may behave under the threat of regulation. To this aim, we integrate the self-regulation model of Glazer and McMillan (Q J Econ 107(3):1089-1099, 1992) with the optimal regulatory mechanism devised by Baron and Myerson (Econometrica 50(4):911-930, 1982) for the case of asymmetric information. Simulating the equilibrium outcome of our integrated model for a wide range of parameter values, we show among many results that the firm threatened with regulation always constrains its price; moreover, the price the firm charges under the threat of regulation can be even lower than the price it has to charge when it is regulated.
ISSN: 0391-2078
Appears in Collections:İktisat Bölümü / Department of Economics
Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection
WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection

Show full item record

CORE Recommender

Page view(s)

checked on Dec 26, 2022

Google ScholarTM



Items in GCRIS Repository are protected by copyright, with all rights reserved, unless otherwise indicated.