Implementing Efficient Market Structure

Veronika Grimm, Frank Riedel () and Elmar Wolfstetter ()

No CESifo Working Paper No. 269, CESifo Working Paper Series from CESifo Group Munich

Abstract: This article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the regulator is unable to control the behavior of firms once they are in the market. We adapt the Clark-Groves mechanism, characterize the optimal mechanism that maximizes the weighted sum of expected social surplus and expected tax revenue, and show that these mechanisms generally avoid budget deficits and prevent excessive entry.

Keywords: Mechanism design; natural oligopoly; auctions; entry (search for similar items in EconPapers)
JEL-codes: D43 D44 D45 H20 L13 (search for similar items in EconPapers)
Date: Written
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Related works:
Working Paper: Implementing Efficient Market Structure (2000)
Working Paper: Implementing Efficient Market Structure
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