IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Financing Infrastructure under Budget Constraint

  • Axel Gautier
  • Manipushpak Mitra

In this paper we consider the problem of financing infrastructure when the regulator faces a budget constraint. The optimal budget-constrained mechanism satisfies four properties. The first property is bunching at the top, that is the more efficient firms produce the same quantity. The second property is self-selection for the less efficient firms. The third property is that the mechanism is a third best one. In other words, as long as the budget-constraint is binding, the optimal output is strictly lower than the second best output for any given type. Finally, if the budget constraint is too strong, then we have a full bunching solution.

If 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.

File URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse15_2002.pdf
Download Restriction: no

Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse15_2002.

as
in new window

Length: 18
Date of creation: Jun 2002
Date of revision:
Handle: RePEc:bon:bonedp:bgse15_2002
Contact details of provider: Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. repec:att:wimass:9609 is not listed on IDEAS
  2. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December.
  3. Che, Y.K. & Gale, I., 1995. "The Optimal Mechanism for Selling to Budget-Constrained Consumers," Working papers 9415r, Wisconsin Madison - Social Systems.
  4. KLINGER MONTEIRO , Paulo & PAGE, Frank H. Jr., 1997. "Optimal selling mechanisms for multiproduct monopolists : incentive compatibility in the presence of budget constraints," CORE Discussion Papers 1997011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Laffont, Jean-Jacques & Robert, Jacques, 1996. "Optimal auction with financially constrained buyers," Economics Letters, Elsevier, vol. 52(2), pages 181-186, August.
  6. Axel Gautier, 2004. "Regulation under Financial Constraints," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(4), pages 645-656, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bon:bonedp:bgse15_2002. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (BGSE Office)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.