Research Details

Abstract

Regulation typically involves a continuing relationship between a regulator and a firm, and that relationship is often complicated by asymmetric information. A multiperiod model of this relationship is analyzed in which a regulated firm has private information about its costs which may changed over time in a manner observable only to the firm. The regulator is assumed to be able to commit to a policy for the entire regulatory horizon, and the optimal pricing policy is shown to depend on an informativeness measure that indicates how information by the firm in one period will be used in future periods.

Type

Article

Author(s)

David Baron, David Besanko

Date Published

1984

Citations

Baron, David, and David Besanko. 1984. Regulation Information in a continuing Relationship. Information Economics and Policy.(3): 267-302.