This paper studies whether a monopolist with private marginal cost information has incentives to make cost-reducing innovations through research and development (R&D) when its output and price are regulated according to the incentive-compatible mechanism of Baron and Myerson (1982). Under...

We show that in oligopolistic markets the social choice correspondence which selects all socially efficient outcomes is Nash implementable if the number of firms is at least two. Thus, monopoly regulation whenever consumers are favored by the designer or the society is the only framework, among...