Regulating a Monopolist with Unknown Demand and Cost Functions
AbstractWe consider the design of regulatory policy when the regulator is imperfectly informed about both the firm's cost function and the demand function it faces. To some extent the optimal policy here is the natural "combination" of the optimal policies when there is uncertainty only about either demand or cost. Important qualitative differences also exist, however. For example, it may be optimal to set prices below marginal cost, and the pricing authority delegated to the firm may be more limited when there is uncertainty about both cost and demand.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 19 (1988)
Issue (Month): 3 (Autumn)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- van Egteren, Henry, 1996. "Regulating an externality-generating public utility: A multi-dimensional screening approach," European Economic Review, Elsevier, vol. 40(9), pages 1773-1797, December.
- Armstrong, Mark, 1999. "Optimal Regulation with Unknown Demand and Cost Functions," Journal of Economic Theory, Elsevier, vol. 84(2), pages 196-215, February.
- Prieger, James E. & Sanders, Nicholas J., 2012.
"Verifiable and non-verifiable anonymous mechanisms for regulating a polluting monopolist,"
Journal of Environmental Economics and Management,
Elsevier, vol. 64(3), pages 410-426.
- James E. Prieger & Nicholas J. Sanders, 2011. "Verifiable and Non-Verifiable Anonymous Mechanisms for Regulating a Polluting Monopolist," Discussion Papers 10-034, Stanford Institute for Economic Policy Research.
- Evans, Lewis & Hahn, Robert W., 2010. "Regulating Dynamic Markets: Progress in Theory and Practice," Working paper 606, Regulation2point0.
- Iossa, Elisabetta & Stroffolini, Francesca, 2002. "Price cap regulation and information acquisition," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 1013-1036, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.