Incomplete Regulation, Asymmetric Information, and Collusion-Proofness
Joint Authors
Sarmento, Paula
Meireles, Marco
Source
Economics Research International
Issue
Vol. 2012, Issue 2012 (31 Dec. 2012), pp.1-17, 17 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2012-02-09
Country of Publication
Egypt
No. of Pages
17
Main Subjects
Abstract EN
In an incomplete regulation framework, the regulator cannot replicate all the possible outcomes by himself since he has no influence over some firms in the market.
Due to asymmetric information, it may be better for the regulator to allow the unregulated firms to extract a truthful report from the regulated firm through side-payments under collusion, and therefore the “collusion-proofness principle” may not hold.
In fact, by introducing an exogenous number of unregulated firms, social welfare differences seem to favour a collusion-allowing equilibrium.
However, such result will depend on the relative importance given by the regulator to the consumer surplus in the social welfare function.
American Psychological Association (APA)
Meireles, Marco& Sarmento, Paula. 2012. Incomplete Regulation, Asymmetric Information, and Collusion-Proofness. Economics Research International،Vol. 2012, no. 2012, pp.1-17.
https://search.emarefa.net/detail/BIM-500603
Modern Language Association (MLA)
Meireles, Marco& Sarmento, Paula. Incomplete Regulation, Asymmetric Information, and Collusion-Proofness. Economics Research International No. 2012 (2012), pp.1-17.
https://search.emarefa.net/detail/BIM-500603
American Medical Association (AMA)
Meireles, Marco& Sarmento, Paula. Incomplete Regulation, Asymmetric Information, and Collusion-Proofness. Economics Research International. 2012. Vol. 2012, no. 2012, pp.1-17.
https://search.emarefa.net/detail/BIM-500603
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-500603