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https://hdl.handle.net/20.500.11851/7449
Title: | Self-regulation under asymmetric cost information | Authors: | Sağlam, İsmail | Keywords: | Monopoly Regulation Self-regulation 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. | URI: | https://doi.org/10.1007/s40812-021-00191-0 https://hdl.handle.net/20.500.11851/7449 |
ISSN: | 0391-2078 1972-4977 |
Appears in Collections: | İktisat Bölümü / Department of Economics Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection |
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