Government Outsourcing: Public Contracting with Private Monopoly

Emmanuelle Auriol and Pierre Picard

No 5643, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The paper studies the impact of government budget constraint in a pure adverse selection problem of monopoly regulation. The government maximizes total surplus but incurs some cost of public funds à la Laffont and Tirole (1993). An alternative to regulation is proposed in which firms are free to enter the market and to choose their price and output levels. However the government can contract ex-post with the private firms. This ex-post contracting set-up allows more flexibility than traditional regulation where governments commit to both investment and operation cash-flows. This is especially relevant in case of high technological uncertainties.

Keywords: Privatization; Soft-budget constraint; Adverse selection; Regulation; Natural monopoly (search for similar items in EconPapers)
JEL-codes: D82 L33 L43 L51 (search for similar items in EconPapers)
Date: 2006-04
New Economics Papers: this item is included in nep-com, nep-cse, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cepr.org/publications/DP5643 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Government Outsourcing: Public Contracting with Private Monopoly (2009)
Journal Article: Government Outsourcing: Public Contracting with Private Monopoly (2009)
Working Paper: Government outsourcing: public contracting with private monopoly (2009)
Working Paper: Government Outsourcing: Public Contracting with Private Monopoly (2008)
Working Paper: Government Outsourcing: Public Contracting with Private Monopoly (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:5643

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP5643

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().