Optimal regulation with unknown demand and cost functions.

The writer examines optimal regulation of a firm that has private information about both its cost and demand functions. He discusses Lewis and Sappington's (1998) analysis of this issue, considers a difficulty with their analysis, and proposes an alternative formulation of their model. He consider...

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Publicado en:Journal of Economic Theory Vol. 84; no. 2; pp. 196 - 216
Autor principal: Armstrong, Mark
Formato: Artículo
Publicado: Academic Press Inc. February 1999
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      pub: Academic Press Inc.
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        atl: Optimal regulation with unknown demand and cost functions.
      aug:
        au: Armstrong, Mark
      su:
        Information theory in economics
        Mathematical models
        Direct costing
        Mathematical models of pricing
        Economic demand
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          Information theory in economics
          Mathematical models
          Direct costing
          Mathematical models of pricing
          Economic demand
      ab: The writer examines optimal regulation of a firm that has private information about both its cost and demand functions. He discusses Lewis and Sappington's (1998) analysis of this issue, considers a difficulty with their analysis, and proposes an alternative formulation of their model. He considers two broad types of problem: the case where private and social incentives are roughly aligned, which implies that optimal prices are weakly above marginal costs; and the case where private and social incentives diverge, implying that pricing below marginal cost might be optimal.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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