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 behavior of firms once they are in the market. We adapt the Clarke-Groves mechanism, characterize the optimal mechanism that maximizes the weighted sum of expected social surplus and expected tax revenue, and show that these mechanisms generally avoid budget deficits and prevent excessive entry. -- auctions ; mechanism design ; natural oligopoly ; entry

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Year of publication:	2000
Authors:	Grimm, Veronika ; Riedel, Frank ; Wolfstetter, Elmar
Institutions:	Sonderforschungsbereich Quantifikation und Simulation Ökonomischer Prozesse (contributor)
Publisher:	Berlin : Humboldt-Universität
Subject:	Auktionstheorie \| Auction theory \| Regulierung \| Regulation \| Oligopol \| Oligopoly \| Markteintritt \| Market entry \| Wohlfahrtsanalyse \| Welfare analysis \| Natürliches Monopol \| Natural monopoly \| Leistungsanreiz \| Performance incentive \| Konzession \| Concession \| Steuerpolitik \| Tax policy \| Marktstruktur \| Market structure