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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.

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  • Elisabetta Iossa & Francesca Stroffolini, 2004. "Price Cap, Revenue Sharing and Information Acquisition," Economics and Finance Discussion Papers 04-04, Economics and Finance Section, School of Social Sciences, Brunel University.
  • Handle: RePEc:bru:bruedp:04-04

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