Regulating a Monopolist with unknown costs and unknown quality capacity
Charles Blackorby and
Dezsoe Szalay ()
No 269856, Economic Research Papers from University of Warwick - Department of Economics
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.
Keywords: Agricultural and Food Policy; Industrial Organization (search for similar items in EconPapers)
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Working Paper: Regulating a Monopolist with unknown costs and unknown quality capacity (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:269856
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