Financing Infrastructure under Budget Constraint
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.
|Date of creation:||Jun 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
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.:
- Monteiro, Paulo K. & Page Jr., Frank H., 1998.
"Optimal selling mechanisms for multiproduct monopolists: incentive compatibility in the presence of budget constraints,"
Journal of Mathematical Economics,
Elsevier, vol. 30(4), pages 473-502, November.
- Paulo Klinger Monteiro & Frank H. Page Jr., 1996. "Optimal Selling Mechanisms for Multiproduct Monopolists: Incentive Compatibility in the Presence of Budget Constraints," Microeconomics 9610002, EconWPA.
- 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).
- Che, Y.K. & Gale, I.,, 1994. "The Optimal Mechanism for Selling to Budget-Constrained Consumers," Working papers 9415, Wisconsin Madison - Social Systems.
- Che, Y.K. & Gale, I., 1996. "The Optimal Mechanism for Selling to Budget-Constrained Consumers," Working papers 9609, Wisconsin Madison - Social Systems.
- Che, Y.K. & Gale, I., 1995. "The Optimal Mechanism for Selling to Budget-Constrained Consumers," Working papers 9415r, Wisconsin Madison - Social Systems.
- Axel Gautier, 2004. "Regulation under Financial Constraints," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(4), pages 645-656, December.
- GAUTIER, Axel, "undated". "Regulation under financial constraints," CORE Discussion Papers RP 1815, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Axel Gautier, 2002. "Regulation under Financial Constraints," Bonn Econ Discussion Papers bgse16_2002, University of Bonn, Germany.
- 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.
- Laffont, Jean-Jacques & Robert, Jacques, 1996. "Optimal auction with financially constrained buyers," Economics Letters, Elsevier, vol. 52(2), pages 181-186, August. Full references (including those not matched with 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 references are entirely missing, you can add them using this form.