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Price Cap, Revenue Sharing and Information Acquisition

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Author Info
ELISABETTA IOSSA ()
FRANCESCA STROFFOLINI ()

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Abstract

We study the incentives of regulated firms to acquire costly information under price cap regulation.We show that revenue sharing plans, in the spirit proposed by Sappington and Weisman(1996), can provide greater incentives for information acquisition than pure price capping and increase social welfare.

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File URL: http://www.brunel.ac.uk/329/efwps/04-04.pdf
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Publisher Info
Paper provided by Economics and Finance Section, School of Social Sciences, Brunel University in its series Public Policy Discussion Papers with number 04-04.

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Length: 22 pages
Date of creation: Feb 2004
Date of revision:
Handle: RePEc:bru:bruppp:04-04

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Postal: Brunel University, Uxbridge, Middlesex UB8 3PH, UK

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