Analysis compares regulatory frameworks for transport firms with hidden cost data, indicating optimal conditions.
The paper analyses three different policy regimes for regulating a transport company with private information about costs. Each policy is defined by a public monitoring strategy and a contractual relationship. By defining the expected public administrative costs of collecting information, we derive the necessary and sufficient conditions for the different regulation systems to be compared.
No takes yet. Share an insight, caveat, or question.
P.A. Pedersen (1994) studied this question.