Single-Till Regulation, Dual-Till Regulation, and Social Welfare

This paper analyzes single-till and dual-till regulations in terms of social welfare. We clarify two conditions to determine which regulation yields a higher welfare. The first condition is whether the solutions under welfare maximization yield positive or negative regulatory profits. The second condition is whether the profit of non-core business is positive or negative. Specifically, if the solution under unconstrained welfare maximization yields a positive (negative) regulatory profit, then the dual-till (single-till) regulation yields a higher welfare, as long as the profit of non-core business is positive. If the profit of non-core business is negative, the above results are reversed