Please use this identifier to cite or link to this item: 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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