Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/189318
Authors: 
Chen, Yongmin
Wang, Ruqu
Year of Publication: 
2005
Series/Report no.: 
Queen's Economics Department Working Paper No. 1034
Abstract: 
The effects of information on market design are explored in a simple setting where firms have private information about their correlated fixed costs and the government aims to maximize its expected revenue conditional on achieving efficient allocations. Government revenues are higher when the costs are less correlated (or are more of a private value). The reduced correlation increases the firms' information rents, but a change in the information structure also changes the expected market structures with positive effects on government revenues. If the government faces the no-deficit constraint, there are situations where efficient allocations are achieved under asymmetric information but not under symmetric information.
Subjects: 
market structure
correlated values
market design
government revenue
JEL: 
D4
L1
H8
Document Type: 
Working Paper

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