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Competition and the reform of incentive schemes in the regulated sector

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  • Boyer, Marcel

Abstract

We 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 modèle principal-agent avec sélection adverse et contrats complets comment les incitations dans une entreprise réglementée sont affectées par la concurrence externe à travers son effet sur l'information et la fonction objectif du principal d'une part et les contraintes de compatibilité incitative et de rationalité individuelle de l'agent d'autre part. Nous considérons plus précisément 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 privé plus efficace, et l'existence de meilleurs substituts. Nous caractérisons dans chaque cas les conditions sous lesquelles l'effet sur les incitations est positif.
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(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of th
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Boyer, Marcel, 2003. "Competition and the reform of incentive schemes in the regulated sector," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1353-1381, August.
  • Handle: RePEc:eee:pubeco:v:87:y:2003:i:7-8:p:1353-1381
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    Cited by:

    1. Josse Delfgaauw & Robert Dur, 2008. "Incentives and Workers' Motivation in the Public Sector," Economic Journal, Royal Economic Society, vol. 118(525), pages 171-191, January.
    2. Guerriero, Carmine, 2013. "The political economy of incentive regulation: Theory and evidence from US states," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 91-107.
    3. Guerriero, Carmine, 2011. "Accountability in government and regulatory policies: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 453-469.
    4. Erdogdu, Erkan, 2005. "Energy market reforms in Turkey: An economic analysis," MPRA Paper 26929, University Library of Munich, Germany.
    5. Mikhail Drugov, 2010. "Information and delay in an agency model," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 598-615.
    6. Drugov, Mikhail, 2014. "Bargaining with Informational Externalities in a Market Equilibrium," CEPR Discussion Papers 10021, C.E.P.R. Discussion Papers.
    7. Piccolo, Salvatore & D'Amato, Marcello & Martina, Riccardo, 2008. "Product market competition and organizational slack under profit-target contracts," International Journal of Industrial Organization, Elsevier, vol. 26(6), pages 1389-1406, November.
    8. Jakub Kastl & Marco Pagnozzi & Salvatore Piccolo, 2015. "Selling Information to Competitive Firms," CSEF Working Papers 420, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • 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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