Huric Larsen, J.F. (2012): Public firm incentives under asymmetric information and prospect of deregulation and privatization.
Download (170kB) | Preview
Governments dislike poorly performing public firms and often see deregulation and privatisation as a way to improve performance and social welfare. From a theoretical point of view poor performance may be due to information asymmetries between the informed public firm and the relatively uninformed regulator. The point of view in the paper is that the information asymmetries that makes the regulator unable to achieve first best during regulation, is also the cause of deregulation and privatization failure. The effect on public firm incentives from introducing deregulation as a consequence from choosing a specific regulation contract is analysed.
|Item Type:||MPRA Paper|
|Original Title:||Public firm incentives under asymmetric information and prospect of deregulation and privatization|
|Keywords:||Regulation, public firms, incentives, optimal deregulation, asymmetric information, deregulation, privatization, contracts, public policy|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles
|Depositing User:||Jesper Fredborg Huric Larsen|
|Date Deposited:||09. Jun 2012 22:32|
|Last Modified:||20. Feb 2013 12:28|
Armstrong, M. (1999). Optimal Regulation with Unknown Demand and Cost Functions. Journal of Economic Theory, 84(2), 196-215.
Baron, D.P., & Myerson, R.B. (1982). Regulating a Monopolist with Unknown Costs. Econometrica, 50(4), 911-930.
Baron, D.P., & Besanko, D. (1984). Regulation, Asymmetric Information, and Auditing. RAND Journal of Economics, 15(4), 447-470.
Boubakri, N., & Cosset, J.-C. (1998). The Financial and Operating Performance of Newly Privatised Firms: Evidence from Developing Countries. The Journal of Finance, 53(3), 1081-1110.
Dana, J., (1993). The Organization and Scope of Agents: Regulating Multiproduct Industries. Journal of Economic Theory, 59(2), 288-310.
Domberger, S., (1993). Privatisation: What does the British Experience Reveal? Economic Papers, 12(2), 58-68.
D’Souza, J., & Megginson, W.L. (1999). The Financial and Operating Performance of Privatized Firms during the 1990s. The Journal of Finance, 54(4), 1397-1438.
Eckel, C., Eckel, D., & Singal, V. (1996). Privatization and Efficiency: Industry Effects of the Sale of British Airways. Journal of Financial Economics, 43, 275-298.
Green, R., & Vogelsang, I. (1991). British Airways: A Turn - Around Anticipating Privatization. In Bös, D. (1991). Privatization; A theoretical Treatment. Clarendon Press, Oxford.
Hodge, G. A. (2000). Privatization: An International Review of Performance. Westview Press, A member of the Perseus Books Group, 2000.
Hunt, L.C., & Lynk, E.L. (1995). Privatization and Efficiency in the UK Water Industry: An Empirical Analysis. Oxford Bulletin of Economics and Statistics, 57(3), 371-88.
Parker, D., & Hartley, K. (1991). Do Changes in Organizational Status Affect Financial Performance? Strategic Management Journal, 12(8), 631-641.
Laffont, J.J., & Martimort, D. (2002). The Theory of Incentives: The Principal – Agent Model. Princeton University Press.
Laffont, J.J., & Tirole, J. (1990). Adverse Selection and Renegotiation in Procurement. Review of Economic Studies, 57, 597-625.
Laffont, J.J., & Tirole, J. (1988). The Dynamics of Incentive Contracts. Econometrica, 56(5), 1153-1175.
Laffont, J.J., & Tirole, J. (1986). Using Cost Observation to Regulate Firms. Journal of Political Economy, 94(3), 614-641.
Leeds, R.S. (1991). Privatization through Public Offerings: Lessons from Two Jaimaican Cases. In Ramamurti, R. & Vernon, R. (Eds.), Privatization and Control of State-owned Enterprises, World Bank, 86-125.
Lewis, T., & Sappington, D. (1989). Countervailing Incentives in Agency problems. Journal of Economic Theory, 49(2), 294-313.
Lewis, T., & Sappington, D. (1988). Regulating a Monopolist with Unknown Demand. American Economic Review, 78(5), 986-998.
Loeb, M., & Magat, W. (1979). A Decentralised Method for Utility Regulation. Journal of Law and Economics, 22, 399-401.
Moussios, A. (1994). ”Hybrid” Status, Regulation and Performance: An Empirical Analysis of the Decentralisation of British Telecom. DPA Thesis, University of Georgia.
Perotti, E.C. (1995). Credible Privatization. The American Economic Review, 85(4), 847-859.
Perotti, E.C., & Guney, S.E. (1993). The Structure of Privatization Plans. Financial Management, 22(1), 84-98.
Price, C. (1992). Regulation of the UK Gas Industry. Annals of Public and Cooperative Economics, 63(2), 189-206.
Sappington, D., & Stiglitz, J. (1987). Privatization, Information and Incentives. Journal of Policy Analysis and Management, 6, 567-582.
Schmitz, P.W. (2000). Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered. FinanzArchiv, 57, 394-411.
Vickers, J.S., & Yarrow, G. (1988). Privatization: An Economic Analysis. Cambridge, MIT Press.
Welsby, J., & Nichols, A. (1999). The Privatization of Britain’s Railways: An inside View. Journal of Transport Economics and Policy, 33(1), 55-76.
Yarrow, G. (1986). Privatization in Theory and Practice. Economic Policy, April 1986, 323-364.