Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155202
Authors: 
Calzolari, Giacomo
Scarpa, Carlo
Year of Publication: 
2001
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 39.2001
Abstract: 
This paper analyses in a hidden characteristic set-up the design of the optimal price for a firm which is a monopolist at home but competes abroad against foreign firms. As long as diseconomies of scope are not too strong, the optimal price is identified. The price rule depends on the sign of the technological relationship between home output and foreign output. With economies of scope, the regulator should set a price below marginal cost, in order to help the firm in the foreign market, and vice-versa with diseconomies of scope. Informational asymmetry introduces a distortion in the price rule, which is usually amplified by the existence of a foreign market.
Subjects: 
Regulation
asymmetric information
multinational
JEL: 
L51
L97
F23
Document Type: 
Working Paper

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