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18 août 2024
- 2408.09473
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Economics - Theoretical EconomicsSujets proches
Economic theory Political economyCiter ce document
Debasis Mishra et al., « Undominated monopoly regulation », arXiv - économie
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Résumé
We study undominated mechanisms with transfers for regulating a monopolist who privately observes the marginal cost of production. We show that in any undominated mechanism, there is a quantity floor, which depends only on the primitives, and the regulator's operation decision is stochastic only if the monopolist produces at the quantity floor. We provide a near-complete characterization of the set of undominated mechanisms and use it to (a) provide a foundation for deterministic mechanisms, (b) show that the efficient mechanism is dominated, and (c) derive a max-min optimal regulatory mechanism.