Collusion-proof yardstick competition

• 成果类型: Article
• 署名作者: Tangerås, TP
• 署名单位: Universite de Toulouse; Universite Toulouse 1 Capitole
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(00)00173-0
• 发表日期: 2002
• 页码: 231-254
• 关键词: yardstick competition; collusion; collusion-proofness; regulation

摘要

This paper analyses the incentives for collusion among firms when an industry is regulated by means of yardstick competition. The central assumption is that firms must write collusive side contracts before the revelation of private, correlated information and are unable to communicate later. The analysis shows that collusion is costly to society only if firms can commit to side payments. Third-best, collusion-proof yardstick competition entails more (less) distortion of efficiency for low-productivity (high-productivity) firms than second-best yardstick competition. The benefit of yardstick competition vanishes in the limit as correlation of private information becomes near perfect. (C) 2002 Elsevier Science B.V. All rights reserved.