Incomplete Regulation, Asymmetric Information and Collusion-Proofness
In an incomplete regulation framework the Regulator cannot replicate all the possible outcomes by himself since he has no influence on some firms present in the market. When facing asymmetric information regarding the regulated firm’s costs, it may be better for the Regulator to allow the other competitors to extract a truthful report from her through side-payments in a collusion and therefore the “Collusion-Proofness Principle” may not hold. In fact, by introducing an exogenous number of unregulated competitors, Social Welfare differences seem to favour a Collusion-Allowing equilibrium. However, such result will strongly depend on the relative importance given by the Regulator to the Consumer Surplus.
|Date of creation:||Apr 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.fep.up.pt/
More information through EDIRC
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.:
- Laffont, Jean-Jacques & Martimort, David, 1998.
"Mechanism Design with Collusion and Correlation,"
IDEI Working Papers
81, Institut d'Économie Industrielle (IDEI), Toulouse.
- Laffont, J.J. & Martimort, D., 1996.
"Collusion Under Asymmetric Information,"
95.389, Toulouse - GREMAQ.
- Cécile Aubert & Jerôme Pouyet, 2004.
"Incomplete Regulation, Market Competition and Collusion,"
2004-39, Centre de Recherche en Economie et Statistique.
- Cécile Aubert & Jérôme Pouyet, 2006. "Incomplete regulation, market competition and collusion," Review of Economic Design, Springer, vol. 10(2), pages 113-142, August.
- Aubert, Cécile & Pouyet, Jérôme, 2006. "Incomplete regulation, market competition and collusion," Economics Papers from University Paris Dauphine 123456789/13654, Paris Dauphine University.
- Cécile Aubert & Jérôme Pouyet, 2006. "Incomplete Regulation, Market Competition and Collusion," Post-Print hal-00151744, HAL.
- Tangeras, Thomas P., 2002.
"Collusion-proof yardstick competition,"
Journal of Public Economics,
Elsevier, vol. 83(2), pages 231-254, February.
- Myerson, Roger B, 1979.
"Incentive Compatibility and the Bargaining Problem,"
Econometric Society, vol. 47(1), pages 61-73, January.
- Roger B. Myerson, 1977. "Incentive Compatability and the Bargaining Problem," Discussion Papers 284, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-38, March.
- Caillaud, Bernard, 1990. "Regulation, competition, and asymmetric information," Journal of Economic Theory, Elsevier, vol. 52(1), pages 87-110, October.
When requesting a correction, please mention this item's handle: RePEc:por:fepwps:320. 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: ()
If references are entirely missing, you can add them using this form.