1. Under what conditions would the regulator wish to offer contracts which ensure that the high-cost type never produces and the low-cost type has the first-best contract? 2. Show that, in the...

1. Under what conditions would the regulator wish to offer contracts which ensure that the high-cost type never produces and the low-cost type has the first-best contract?

2. Show that, in the two-period regulation game, if the regulator can commit to her period 2 contracts the optimal policy is to offer the optimal one-period contracts in both periods.

May 26, 2022

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1. Under what conditions would the regulator wish to offer contracts which ensure that the high-cost type never produces and the low-cost type has the first-best contract? 2. Show that, in the...

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