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Partial privatization and screening

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  • Hongbin Li
  • Qian Wang

Abstract

It is shown that the government, in privatizing state owned enterprises, can use partial privatization as a screening mechanism to elicit private information from the manager about the firm's value. Although some new owners do not have maximum incentives, this screening contract allows the government to maximize its privatization revenues.

Suggested Citation

  • Hongbin Li & Qian Wang, 2005. "Partial privatization and screening," Applied Economics Letters, Taylor & Francis Journals, vol. 12(11), pages 653-655.
    • Handle: RePEc:taf:apeclt:v:12:y:2005:i:11:p:653-655
    DOI: 10.1080/13504850500184215
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    References listed on IDEAS

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    1. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-641, June.
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    6. Abdullah Al-Obaidan, 2002. "Efficiency effect of privatization in the developing countries," Applied Economics, Taylor & Francis Journals, vol. 34(1), pages 111-117.
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