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POSTPONED: Yingni Guo (Northwestern)

18 March 2020 @ 12:00 - 13:15

 

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Details

Date:
18 March 2020
Time:
12:00 - 13:15
Event Category:
Academic Events

“Robust Monopoly Regulation”

Abstract: We study the regulation of a monopolistic firm using a non-Bayesian approach. We derive the policy that minimizes the regulator’s worst-case regret, where regret is the difference between the regulator’s complete-information payoff and his realized payoff. When the regulator’s payoff is consumers’ surplus, he imposes a price cap. When his payoff is the total surplus of both consumers and the firm, he offers a capped piece rate subsidy. For intermediate cases, the regulator uses both a price cap and a capped piece-rate subsidy. The optimal policy balances three goals: giving more surplus to consumers, mitigating underproduction, and mitigating overproduction.