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Incentives in Multi-Period Regulation and Procurement : a Graphical Analysis

  • Dionne, G.
  • Fluet, C.

Cet article analyse les politiques de réglementation et d'achat public sur plusieurs périodes en présence d'asymétrie d'information entre le régulateur et les entreprises réglementées. Le cadre général de Laffont et Tirole est utilisé. Nous proposons une analyse graphique du modèle de second-rang en termes de la capacité d'engagement du régulateur. Comme dans Laffont et Tirole, nous distinguons les cas de plein engagement, d'engagement avec contrainte de renégociation et de non-engagement. Notre analyse graphique de l'environnement à deux périodes-deux types nous permet de mettre l'accent sur les fondements des principaux résultats concernant la nature des contrats incitatifs optimaux et de proposer des extensions à la contribution de Laffont et Tirole. Le modèle peut être appliqué à des secteurs où la production de biens publics (comme la sécurité dans le transport des matières dangereuses) est déléguée à des entreprises privées. This paper analyses multi-period regulation or procurement policies under asymmetricinformation-between the regulator and regulated firms within the general framework developed by Laffont and Tirole. We provide a graphical analysis of the second-best policy in terms of the regulator's commitment capacity. As in Laffont and Tirole, we distinguish between full commitment (long-term contracts that can be committed to), commitment and renegotiation (renegotiation-proof long-term contracts and noncommitment (a series of short-term contracts). Our graphical analysis of the two-period, two-type environment emphasizes the rationale of the main results concerning the form of the optimal incentive scheme and extends Laffont and Tirole's contribution. The analysis can be applied to situations where the production of a public good or service (such as the level of safety in the transport of hazardous materials) is delegated to private firms.

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File URL: http://hdl.handle.net/1866/2103
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Paper provided by Universite de Montreal, Departement de sciences economiques in its series Cahiers de recherche with number 9533.

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Length: 44 pages
Date of creation: 1995
Date of revision:
Handle: RePEc:mtl:montde:9533
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