Regulating Oligopolistic Competition

Kai Hao Yang and Alexander K. Zentefis

Papers from arXiv.org

Abstract: We consider the problem of how to regulate an oligopoly when firms have private information about their costs. In the environment, consumers make discrete choices over goods, and minimal structure is placed on the manner in which firms compete. In the optimal regulatory policy, the regulator need only solicit prices from firms, and based on those prices, charge them taxes or give them subsidies, and impose on each firm a ``yardstick'' price cap that depends on the posted prices of competing firms.

Date: 2023-02, Revised 2024-02
New Economics Papers: this item is included in nep-com and nep-mic
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Published in Journal of Economic Theory, 212:105709 (2023)

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2302.03185

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