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Regulation under Wealth Constraints

Author

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  • Gautier, Axel

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

This article studies the problem of regulating a monopolist with unknown marginal cost. The problem described differs from Baron and Myerson [1982] because we suppose that the regulator faces a cash-in-advance constraint. The introduction of such a constraint may lead to the collapse of the incentive system.

Suggested Citation

  • Gautier, Axel, 2000. "Regulation under Wealth Constraints," LIDAM Discussion Papers IRES 2000014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2000014
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2000-14.pdf
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    References listed on IDEAS

    as
    1. Tirole, Jean, 1986. "Procurement and Renegotiation," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 235-259, April.
    2. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
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    More about this item

    Keywords

    Regulation; asymmetric information; monopolist;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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