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Research Details

Bargaining and Regulation with Asymmetric Information about Demand and Supply, Journal of Economic Theory

Abstract

Rate regulation is studied as a bargaining process in which consumers and the firm negotiate output and payments under asymmetric information. The feasible set of transactions given incentive compatibility and individual rationality constraints is characterized. The set of interim incentive efficient mechanisms for the direct revelation game is also characterized. Sufficient conditions are given for efficient mechanisms to be full information efficient. Efficient mechanisms are identified which correspond to nonlinear monopoly pricing, monosony compensation schedules, and the Baron-Myerson regulation model.

Type

Article

Author(s)

Daniel Spulber

Date Published

1988

Citations

Spulber, Daniel. 1988. Bargaining and Regulation with Asymmetric Information about Demand and Supply. Journal of Economic Theory.(2): 251-268.

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