Implementing Efficient Market Structure
AbstractThis article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the regulator is unable to control the behavior of firms once they are in the market. We adapt the Clark-Groves mechanism, characterize the optimal mechanism that maximizes the weighted sum of expected social surplus and expected tax revenue, and show that these mechanisms generally avoid budget deficits and prevent excessive entry.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 269.
Date of creation: 2000
Date of revision:
Mechanism design; natural oligopoly; auctions; entry;
Other versions of this item:
- Grimm, Veronika & Riedel, Frank & Wolfstetter, Elmar, 2000. "Implementing efficient market structure," SFB 373 Discussion Papers 2000,19, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Veronika Grimm & Frank Riedel & Elmar Wolfstetter, 2000. "Implementing Efficient Market Structure," Econometric Society World Congress 2000 Contributed Papers 0268, Econometric Society.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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