Full pooling in multi-period contracting with adverse selection and noncommitment |
| |
Authors: | Georges Dionne Claude Fluet |
| |
Institution: | HEC-Montréal, 3000, Chemin de la C?te-Sainte-Catherine, Montréal, Canada H3T 2A7 (e-mail: dionne@crt.umontreal.ca), CA Université du Québec à Montréal, CP 8888 succ. Centre Ville, Montréal, Canada H3C 3P8 (e-mail: fluet.claude-denys@ugam.ca), CA
|
| |
Abstract: | This paper analyses multi-period regulation or procurement policies under asymmetric information between the regulator and
regulated firms. As well known in the literature, some degree of separation is always optimal under any form of commitment.
In contrast, we show that full pooling is optimal under noncommitment when the discount factor is sufficiently high. We also
discuss the meaning of full pooling under double randomization. Finally, we provide a graphical analysis of the second-best
policy in terms of the regulator's commitment capacity.
Received: 4 December 1996 / 7 October 1999 |
| |
Keywords: | JEL classification:D82 H57 |
本文献已被 SpringerLink 等数据库收录! |
|