Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22826
Authors: 
Gautier, Axel
Year of Publication: 
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

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