Price Cap, Revenue Sharing and Information Acquisition
We study the incentives of regulated firms to acquire costly information under price cap regulation.We show that revenue sharing plans, in the spirit proposed by Sappington and Weisman(1996), can provide greater incentives for information acquisition than pure price capping and increase social welfare.
|Date of creation:||Feb 2004|
|Date of revision:|
|Contact details of provider:|| Postal: Brunel University, Uxbridge, Middlesex UB8 3PH, UK|
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