Template-Type:ReDIF-Paper 1.0  
Title:Incomplete contracting and price regulation
Author-Name: Boes, Dieter
Classification-JEL:D23, L51, O21
Keywords: 	Regulation, Incomplete contracts, Hold-up problem
Abstract:	This paper deals with price regulation of a monopolistic 
	distribution grid which sells a license to some
	retailer. The regulator aims at attaining efficient 
	sale of the license and efficient relationship-specific
	investments of the agents. The first best can be 
	attained by a sequential regulatory mechanism which gives the
	seller an option to grant the license but allows the buyer 
	to make counteroffers. This sequential mechanism runs
	counter to the usual price-cap idea since possible upward 
	but never downward renegotiation of the regulated
	prices is the vehicle to attain the first best.
Length: pages
Creation-Date: 
Revision-Date: 1999-04
Handle: RePEc:bon:bonsfa:593
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonsfa/bonsfa593.pdf
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File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonsfa/bonsfa593.ps
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