[en] Regulation ; asymmetric information ; monopolist ; developing countries
[en] This article studies a simple procurement problem (Laffont and Tirole, 1993) where the regulator faces a cash-in-advance constraint. The introduction of such a constraint not only reduces the amount of public good provided but also limits the instruments available to the regulator. The wealth constraint could change the optimal regulatory contract from a two-part tariff, where the quantities produced depend on the firm's cost, to a less efficient fixed fee where the firm produces the same quantity whatever its cost.
[Université de Liège - ULiège > HEC-Ecole de gestion : UER > Economie industrielle >]
