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Theory of Incentives in Procurement and Regulation

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ISBN-10: 0262121743

ISBN-13: 9780262121743

Edition: 1993

Authors: Jean-Jacques Laffont, Jean Tirole

List price: $95.00
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Description:

More then just a textbook, A Theory of Incentives in Procurement and Regulation will guide economists' research on regulation for years to come. It makes a difficult and large literature of the new regulatory economics accessible to the average graduate student, while offering insights into the theoretical ideas and stratagems not available elsewhere. Based on their pathbreaking work in the application of principal-agent theory to questions of regulation, Laffont and Tirole develop a synthetic approach, with a particular, though not exclusive, focus on the regulation of natural monopolies such as military contractors, utility companies, and transportation authorities. The book's clear and logical organization begins with an introduction that summarizes regulatory practices, recounts the history of thought that led to the emergence of the new regulatory economics, sets up the basic structure of the model, and previews the economic questions tackled in the next seventeen chapters. The structure of the model developed in the introductory chapter remains the same throughout subsequent chapters, ensuring both stability and consistency. The concluding chapter discusses important areas for future work in regulatory economics. Each chapter opens with a discussion of the economic issues, an informal description of the applicable model, and an overview of the results and intuition. It then develops the formal analysis, including sufficient explanations for those with little training in information economics or game theory. Bibliographic notes provide a historical perspective of developments in the area and a description of complementary research. Detailed proofs are given of all major conclusions, making the book valuable as a source of modern research techniques. There is a large set of review problems at the end of the book. Jean-Jacques Laffont is Professor of Economics at Universit des Sciences Sociales in Toulouse where Jean Tirole is Scientific Director at the Institut d'Economi Industrielle.
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Book details

List price: $95.00
Copyright year: 1993
Publisher: MIT Press
Publication date: 3/10/1993
Binding: Hardcover
Pages: 732
Size: 7.50" wide x 10.50" long x 1.75" tall
Weight: 3.696
Language: English

Jean Tirole, the 2014 Nobel Laureate in Economics, is Scientific Director of IDEI (Institut d'Economie Industrielle), Chairman of the Board of TSE (Toulouse School of Economics), and Annual Visiting Professor of Economics at MIT.

Foreword
Acknowledgments
Introduction
Price and Rate-Of-Return Regulation
Cost-Reimbursement Rules
Pricing by a Single-Product Firm With and Without Budget Balance
Pricing and Incentives in a Multiproduct Firm
Regulation of Quality
Product Market Competition
Competitive Ramsey Formulas and Access Pricing
Bypass and Cream Skimming
Bidding for Natural Monopoly
Auctioning Incentive Contracts
Repeated Auctions of Incentive Contracts, Investment, and Bidding Parity
The Dynamics of Regulation
Dynamics Without Commitment and the Ratchet Effect
Commitment and Renegotiation
The Politics of Regulation
Regulatory Capture
Cost Padding, Auditing, and Collusion
Cartelization by Regulation
Auction Design and Favoritism
Regulatory Institutions
Regulatory Instruments, Hearings, and Interest Group Monitoring
Commitment and Political Accountability
Privatization and Incentives
Conclusion
Review Exercises
Index