The Regulation of Predatory Firms

A. Faure Grimaud

Working Papers from Toulouse - GREMAQ

Abstract: This article investigates the issue of predation by a regulated firm. Since it has private information, a regulated firm obtains higher rents incase of successful predation: the fewer the competitors, the higher the marginal social value of the regulated firm's effort and the higher the informational rents. Both principals (the investor of a "target" firm and the regulator) have to provide some incentives to prevent predation: the investor has to reduce the sensitivity of refinancing to predation; the regulator has to lower the gain of successful predation.

Keywords: REGULATIONS; INFORMATION (search for similar items in EconPapers)
JEL-codes: D82 G32 L51 (search for similar items in EconPapers)
Pages: 35 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:fth:gremaq:96.419

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