In developing countries, empirical evidence suggests that labor unions entail a positive wage gap for unionized workers, in particular in monopolistic and publicly controlled firms. In this paper, we analyze how the presence of a labor union affects the regulation of a monopoly under asymmetric...

This chapter reviews recent theoretical work on the design of regulatory policy, focusing on the complications that arise when regulated suppliers have better information about the regulated industry than do regulators. The discussion begins by characterizing the optimal regulation of a monopoly...

Multiemployer collective bargaining relationships between unions and employer associations easily devolve into legalized cartels. Once unions establish themselves as the bargaining representative for employers’ employees, the employers have much to gain from banding together as an association,...

In an industry where regulated firms interact with unregulated suppliers, we investigate the welfare effects of a merger between regulated firms when cost synergies are uncertain before the merger and their realization becomes private information of the merged firm. The optimal merger policy...

The paper starts with a description of major reforms of EU policy in the network industries. Based on the normative economics of regulation, it then points out generic information and transaction cost problems of regulatory policy making. An appropriate allocation of regulatory competencies may...

We study the regulation of a monopolistic firm that provides a non-marketed output based on multiple substitutable inputs. The regulator is able to observe the effectiveness of the provision, but faces information asymmetries with respect to the efficiency of the firm’s activities. Motivated...

The paper starts with a description of major reforms of EU policy in the network industries. Based on the normative economics of regulation, it then points out generic information and transaction cost problems of regulatory policy making. An appropriate allocation of regulatory competencies may...

In an industry where regulated firms interact with unregulated suppliers, we investigate the welfare effects of a merger between regulated firms when cost synergies are uncertain before the merger and their realization becomes private information of the merged firm. The optimal merger policy...

This paper investigates the design of incentives in a dynamic adverse selection framework when agents' production technologies display learning effects and agents' rate of learning is private knowledge. In a simple two-period model with full commitment available to the principal, we show that...

This paper investigates the design of incentives in a dynamic adverse selection framework when agents' production technologies display learning effects and agents' rate of learning is private knowledge. In a simple two-period model with full commitment available to the principal, we show that...