Monopoly regulation under asymmetric information: prices versus quantities

• 成果类型: Article
• 署名作者: Basso, Leonardo J.; Figueroa, Nicolas; Vasquez, Jorge
• 署名单位: Universidad de Chile; Pontificia Universidad Catolica de Chile; Bank of Canada
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12187
• 发表日期: 2017
• 页码: 557-578
• 关键词: cost; CONTRACTS; economies; density; size

摘要

We compare two instruments to regulate a monopoly that has private information about its demand or costs: fixing either the price or quantity. For each instrument, we consider sophisticated (screening) and simple (bunching) mechanisms. We characterize the optimal mechanisms and compare their welfare performance. With unknown demand and increasing marginal costs, the sophisticated price mechanism dominates that of quantity, whereas the sophisticated quantity mechanism may prevail when marginal costs decrease. The simple price mechanism dominates that of quantity when marginal costs decrease, but the opposite may arise if marginal costs increase. With unknown costs, both instruments are equivalent.