Resource title

Regulation of a complementary imputed good in an competitive environment

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Resource description

This article investigates the problem of a regulated imputed good which is used in the production process of the final goods. The relationship between the firm producing the essential input factor and the regulating authority is described by a standard principal-agent setup. We show that ( by assuming a fixed functional relationship in the production process between the imputed good and the final market goods (there exists separation between regulation and competition on the final good market. Thus, the degree of competitiveness on the final good market has no effect on optimal contracts. Moreover, in our model vertical integration weakly dominates vertical disintegration in welfare for subadditive cost functions. (author's abstract) ; Series: Department of Economics Working Paper Series

Resource author

Leopold Sögner

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Resource language

en

Resource content type

application/pdf

Resource resource URL

http://epub.wu.ac.at/128/1/document.pdf

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Adapt according to the license agreement. Always reference the original source and author.