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Monopoly regulation without the Spence–Mirrlees assumption
Authors:Jean-Charles Rochet  
Affiliation:aToulouse School of Economics, Toulouse, France
Abstract:The paper extends the Baron and Myerson [Baron, D., Myerson, R.B., 1982. Regulating a monopolist with unknown costs. Econometrica 50, 911–930] model of monopoly regulation to bidimensional adverse selection: both the marginal cost and the fixed cost of the monopoly are unknown to the regulator. Like in Araujo and Moreira [Araujo, A., Moreira, H., 2000. Adverse section problems without the Spence–Mirrlees condition. Fundação Getulio Vargas, Rio de Janeiro, Ensaios Economicos 389], the paper provides an explicit solution of a screening model without the Spence–Mirrlees assumption.
Keywords:Spence–  Mirrlees condition   Adverse selection   Regulation
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