Competition and the reform of incentive schemes in the regulated sector
AbstractWe consider a regulation problem with complete contracting in a principal-agent model with adverse selection and review within this model the various channels by which external competition parameters affect incentives within the regulated firm. The channels are: the principal's information, the principal's objective function, the agent's incentive constraint, the agent's participation constraint. We consider in particular a better information structure, a threat of liquidation, a fight for talent, a more efficient private sector, and the existence of better substitutes. We characterize in each case the conditions under which the effect on incentives is positive. Nous analysons dans un modÃ¨le principal-agent avec sÃ©lection adverse et contrats complets comment les incitations dans une entreprise rÃ©glementÃ©e sont affectÃ©es par la concurrence externe Ã travers son effet sur l'information et la fonction objectif du principal d'une part et les contraintes de compatibilitÃ© incitative et de rationalitÃ© individuelle de l'agent d'autre part. Nous considÃ©rons plus prÃ©cisÃ©ment les sources suivantes de pressions concurrentielles accrues: une meilleure structure d'information, une menace plus forte de liquidation, une concurrence plus intense pour le talent, un secteur privÃ© plus efficace, et l'existence de meilleurs substituts. Nous caractÃ©risons dans chaque cas les conditions sous lesquelles l'effet sur les incitations est positif.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 87 (2003)
Issue (Month): 7-8 (August)
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Web page: http://www.elsevier.com/locate/inca/505578
Other versions of this item:
- Boyer, Marcel & Laffont, Jean-Jacques, 2003. "Competition and the reform of incentive schemes in the regulated sector," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2369-2396, September.
- Marcel Boyer & Jean-Jacques Laffont, 2000. "Competition and the Reform of Incentive Schemes in the Regulated Sector," CIRANO Working Papers 2000s-58, CIRANO.
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- H1 - Public Economics - - Structure and Scope of Government
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