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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18452| Title: | A Modified Yardstick Competition Mechanism |
| Keywords: | L11 L51 D40 ddc:330 regulation yardstick competition mechanism design information asymmetry |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Deutsches Institut für Wirtschaftsforschung (DIW) Berlin |
| Description: | This paper analyzes a modified yardstick competition mechanism (MYC), where the yardstick employed consists of a tariff basket and total costs. This mechanism has a significant information advantage: the regulator ?only? needs to observe total costs and output of all firms. The modified yardstick competition mechanism can ensure a socially optimal outcome when allowing for spatial and second degree price discrimination, without increasing the informational requirements. We also introduce regulatory lags in the model. A systematic comparison between the results of traditional yardstick regulation and modified yardstick regulation is carried out. Finally, we discuss the applicability of the mechanism. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18452 |
| Other Identifiers: | http://hdl.handle.net/10419/18452 ppn:508572479 |
| Appears in Collections: | EconStor |
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