Gräper, Gerrit; Mankat, Fabian - 2024
This paper studies the pricing incentives of a monopolist constrained by a revenue cap endogenously determined by her … Germany. We show that the revenue cap may incentivize excessive supply in the base year to reap profits in the non-base years …-based revenue cap unambiguously improves welfare and, under some conditions, even leads to the socially optimal outcome. …