Regulating a Monopolist with Unknown Costs Export

@article{citeulike:2952168, abstract = {We consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator. The regulator's objective is to maximize a linear social welfare function of the consumer's surplus and the firm's profit. In the optimal regulatory policy, prices and subsidies are designed as functions of the firm's cost report so that expected social welfare is maximized, subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs. We explicitly derive the optimal policy and analyze its properties.}, author = {Baron, David P. and Myerson, Roger B.}, citeulike-article-id = {2952168}, citeulike-linkout-0 = {http://dx.doi.org/10.2307/1912769}, citeulike-linkout-1 = {http://www.jstor.org/stable/1912769}, doi = {10.2307/1912769}, journal = {Econometrica}, keywords = {policy, regulation}, number = {4}, pages = {911--930}, posted-at = {2008-07-02 14:15:18}, priority = {3}, publisher = {The Econometric Society}, title = {Regulating a Monopolist with Unknown Costs}, url = {http://dx.doi.org/10.2307/1912769}, volume = {50}, year = {1982} }

TY - JOUR ID - citeulike:2952168 L3 - citeulike-article-id:2952168 N2 - We consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator. The regulator's objective is to maximize a linear social welfare function of the consumer's surplus and the firm's profit. In the optimal regulatory policy, prices and subsidies are designed as functions of the firm's cost report so that expected social welfare is maximized, subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs. We explicitly derive the optimal policy and analyze its properties. IS - 4 JF - Econometrica EP - 930 TI - Regulating a Monopolist with Unknown Costs PB - The Econometric Society VL - 50 SP - 911 KW - policy KW - regulation AU - Baron, David AU - Myerson, Roger PY - 1982/// UR - http://dx.doi.org/10.2307/1912769 ER -