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Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn >
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http://hdl.handle.net/10419/22826
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| Title: | | Regulation under Financial Constraints  |
| Authors: | | Gautier, Axel |
| Issue Date: | | 2002 |
| Series/Report no.: | | Bonn econ discussion papers 2002,16 |
| Abstract: | | This article studies the problem of regulating a monopolist with unknown marginal cost. The originality of the paper is to consider that the regulator faces a cash-in-advance constraint. The introduction of such a constraint not only reduces the amount of public good provided but also limits the instruments available to the regulator. The wealth constraint could change the optimal regulatory contract from a two-part tariff, where the quantities produced depend on the firm's cost, to a fixed fee where the firm produces the same quantity whatever its cost. |
| Subjects: | | Regulation Asymmetric information Monopolist |
| JEL: | | D82 L51 H42 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn
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