Article (Scientific journals)
Government Outsourcing: Public Contracting with Private Monopoly
Auriol, Emmanuelle; Picard, Pierre M.
2009In Economic Journal, 119, p. 1463-1493
Peer reviewed
 

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Keywords :
Privatization; soft-budget constraint; regulation; natural monopoly; adverse selection
Abstract :
[en] The article studies the impact of the government budget constraint on the regulation of natural monopolies in adverse selection contexts. The government maximises total surplus but incurs some cost of public funds "à la" Laffont and Tirole (1993). Government outsourcing is proposed as an alternative to regulation in which firms freely enter the market and choose their prices and output levels. However the government can contract "ex post" with the private firms. This "ex post" contracting set-up allows more flexibility than regulation where governments commit to both investment and operation cash-flows. This is especially relevant in case of high technological uncertainties. Copyright � The Author(s). Journal compilation � Royal Economic Society 2009.
Disciplines :
Economic systems & public economics
Author, co-author :
Auriol, Emmanuelle 
Picard, Pierre M. ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Language :
English
Title :
Government Outsourcing: Public Contracting with Private Monopoly
Publication date :
2009
Journal title :
Economic Journal
ISSN :
0013-0133
Publisher :
Blackwell Publishing
Volume :
119
Pages :
1463-1493
Peer reviewed :
Peer reviewed
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since 10 December 2013

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