Implementing efficient market structure

Veronika Grimm; Frank Riedel; Elmar Wolfstetter

This article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the regulator is unable to control the behaviour of firms once they are in the market. We adapt the Clark-Groves mechanism, characterize the optimal mechanism that maximizes the weighted sum of expected social surplus and expected tax revenue, and show that these mechanism generally avoid budget deficits and prevent excessive entry.

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Year of publication:	2000
Authors:	Grimm, Veronika ; Riedel, Frank ; Wolfstetter, Elmar
Publisher:	Munich : Univ., Center for Economic Studies
Subject:	Konzession \| Concession \| Markteintritt \| Market entry \| Regulierung \| Regulation \| Oligopol \| Oligopoly \| Natürliches Monopol \| Natural monopoly \| Leistungsanreiz \| Performance incentive \| Auktionstheorie \| Auction theory \| Steuerpolitik \| Tax policy \| Wohlfahrtsanalyse \| Welfare analysis \| Theorie \| Theory \| Marktzugang