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The Effect of Awareness and Observability on the Non-contractible Investment of a Regulated Natural Monopoly

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dc.contributor.author Sağlam, İsmail
dc.date.accessioned 2019-12-25T12:52:13Z
dc.date.available 2019-12-25T12:52:13Z
dc.date.issued 2019-12
dc.identifier.citation Saglam, I. (2019). The Effect of Awareness and Observability on the Non-contractible Investment of a Regulated Natural Monopoly. Journal of Industry, Competition and Trade, 1-23. en_US
dc.identifier.issn 1566-1679
dc.identifier.uri https://doi.org/10.1007/s10842-019-00306-3
dc.identifier.uri http://hdl.handle.net/20.500.11851/2582
dc.description.abstract This paper studies the joint effect of the regulator’s ex-ante awareness and ex-post ability to observe on the non-contractible investment activities of a natural monopoly with private marginal cost information. We show that the investment activities are lower when the regulator is ex-ante aware of their existence and ex-post able to observe them than when the regulator is never aware of, and never able to observe, them. This result, which points to the regulated firm’s prevention of ratcheting, is in line with an earlier finding of Tirole (J Polit Econ 94:235–259 1986) obtained in a bargaining model of procurement with two-sided asymmetric information. We also find that the producer welfare and the social surplus is always ex-ante higher when the regulator is unaware of its investment activities than when she is aware. Moreover, our computations show that depending on the specifications of our model, the unawareness of the regulator may positively affect the expected consumer and social welfares, as well. en_US
dc.language.iso eng en_US
dc.publisher Springer New York LLC en_US
dc.rights info:eu-repo/semantics/closedAccess
dc.subject Monopoly en_US
dc.subject Regulation en_US
dc.subject  Investment en_US
dc.subject  Awareness en_US
dc.subject  Observability en_US
dc.subject  Asymmetric information en_US
dc.title The Effect of Awareness and Observability on the Non-contractible Investment of a Regulated Natural Monopoly en_US
dc.type article en_US
dc.relation.journal Journal of Industry, Competition and Trade en_US
dc.contributor.department TOBB ETU, Faculty of Economics and Administrative Sciences, Department of Economics en_US
dc.contributor.department TOBB ETÜ, İktisadi ve İdari Bilimler Fakültesi, İktisat Bölümü tr_TR
dc.identifier.volume 19
dc.identifier.issue 4
dc.identifier.startpage 617
dc.identifier.endpage 639
dc.contributor.orcid https://orcid.org/0000-0002-9561-9476
dc.identifier.wos WOS:000494633500004
dc.identifier.scopus 2-s2.0-85065323179
dc.contributor.tobbetuauthor Sağlam, İsmail
dc.identifier.doi 10.1007/s10842-019-00306-3
dc.relation.publicationcategory Makale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı tr_TR


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