Footloose Monopolies: Regulating a “National Champion”

Giacomo Calzolari () and Carlo Scarpa

Journal of Economics & Management Strategy, 2009, vol. 18, issue 4, 1179-1214

Abstract: We analyze the design of optimal regulation of a domestic monopolist that also competes in an unregulated foreign market. We show how foreign activities affect regulation, consumers' surplus, national welfare, and firm's profits. Although expansion in unregulated foreign markets amplifies the distortions that are caused by the regulator's limited information, we also show that allowing the firm to compete abroad does not necessarily harm domestic consumers. We analyze if and when the firm's decision to expand abroad coincides with national interests.

Date: 2009
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Citations: View citations in EconPapers (7)

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https://doi.org/10.1111/j.1530-9134.2009.00242.x

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Working Paper: Footloose Monopolies: Regulating a "National Champion" (2007)
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