network firm has private information about its capacity costs, investments need to be financed out of the firm's cash flows … from selling network access and demand is stochastic. If asymmetric information is large, the optimal mechanism consists of … capacity reaches a threshold. The regulatory holiday is necessary to fund information rents to the most efficient firms, which …

of information can lead to over-provision of quality under optimal regulation, reflecting a dynamic rent extraction … show that for small levels of asymmetric information, the regulator prefers to hire a single agent rather than to contract …, the fact that quality physically links periods together leads to a ratchet effect even when private information is …

I study how limited information and ex-post evaluation by third parties affect how regulators design approval rules for …