Arbeitspapier
Competition and regulation in a differentiated good market
This paper addresses the issue of how to design the institutional structure of an industry which provides two differentiated products. One good is supplied by a regulated monopoly and the other is produced in a competitive (unregulated) segment. Two possible institutional patterns are compared. Under 'concentration' the regulated firm can enter the competitive segment by owning one firm which operates there (even though the two firms must be legally unbundled). The regime of 'separation' implies that regulated activities are totally unbundled from the unregulated ones, that is, common ownership is not allowed. When the regulator does not know the regulated monopoly's cost of production, we find that the pattern of separation improves (expected) social welfare as long as goods are substitutes. Conversely, concentration performs better in case of complementarity.
- Language
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Englisch
- Bibliographic citation
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Series: SFB 649 Discussion Paper ; No. 2011-084
- Classification
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Wirtschaft
Asymmetric and Private Information; Mechanism Design
Production, Pricing, and Market Structure; Size Distribution of Firms
Economics of Regulation
- Subject
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competition
complementarity
concentration
regulation, separation, substitutability
Regulierung
Produktdifferenzierung
Unternehmensregulierung
Wettbewerb
Wirtschaftskonzentration
Theorie
- Event
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Geistige Schöpfung
- (who)
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Fiocco, Raffaele
- Event
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Veröffentlichung
- (who)
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Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
- (where)
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Berlin
- (when)
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2011
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Fiocco, Raffaele
- Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
Time of origin
- 2011