Footloose Monopolies: Regulating a "National Champion"
AbstractWe analyze the design of optimal regulation of a domestic monopolist that also competes in an unregulated foreign market. We show how foreign activities by the regulated firm affect domestic regulation, consumers’ surplus and firm’s profits. Although expansion in unregulated foreign markets amplifies the regulatory distortions that are caused by the regulator’s limited information, we also show that allowing the firm to compete abroad does not necessarily harm domestic consumers and we analyze if and when the firm’s decision to expand abroad does in fact coincide with consumers’ interests in the regulated market.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6413.
Date of creation: Aug 2007
Date of revision:
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Other versions of this item:
- Giacomo Calzolari & Carlo Scarpa, 2009. "Footloose Monopolies: Regulating a "National Champion"," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 1179-1214, December.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-09 (All new papers)
- NEP-COM-2007-09-09 (Industrial Competition)
- NEP-IND-2007-09-09 (Industrial Organization)
- NEP-MIC-2007-09-09 (Microeconomics)
- NEP-REG-2007-09-09 (Regulation)
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