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Regulating a monopolist with unknown costs and unknown quality capacity

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Blackorby, Charles and Szalay, Dezsö (2008) Regulating a monopolist with unknown costs and unknown quality capacity. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.858).

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Abstract

We study the regulation of a firm with unknown demand and cost information. In contrast to previous studies, we assume demand is influenced by a quality choice, and the firm has private information about its quality capacity in addition to its cost. Under natural conditions, asymmetric information about the quality capacity is irrelevant. The optimal pricing is weakly above marginal costs for all types and no type is excluded.

Item Type:

Working or Discussion Paper (Working Paper)

Subjects:

H Social Sciences > HF Commerce

Divisions:

Faculty of Social Sciences > Economics

Library of Congress Subject Headings (LCSH):

Information asymmetry, Trade regulation, Quality control, Cost control

Series Name:

Warwick economic research papers

Publisher:

University of Warwick, Department of Economics

Place of Publication:

Coventry

Official Date:

24 June 2008

Dates:

Date	Event
24 June 2008	Published

Number:

No.858

Number of Pages:

Status:

Not Peer Reviewed

Access rights to Published version:

Open Access

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