Motivating wealth-constrained actors

We examine how owners of productive resources (e.g., public enterprises or financial capital) optimally allocate their resources among wealth-constrained operators of unknown ability. Optimal allocations exhibit: (1) shared enterprise profit - the resource owner always shares the operator's profit; (2) dispersed enterprise ownership -resources are widely distributed among operators of varying ability; (3) limited benefits of competition - the owner may not benefit from increased competition for the resource; and, sometimes, (4) diluted incentives for the most capable - more capable operators receive smaller shares of the returns they generate. Implications for privatizations and venture capital arrangements are explored. (JEL D82, D44, D20)

Optimal industrial targeting with unknown learning-by-doing

We examine a government's optimal targeting policy when it has limited information about the learning curves of domestic producers. Popular arguments suggest that in order to promote learning-by-doing, the government might want to protect domestic producers from foreign competition by temporarily closing the domestic market to foreign producers. We identify a set of conditions under which such trade intervention is not optimal. Instead, domestic welfare is better fostered either by no government intervention, or by providing subsidies to the most capable domestic producers who are willing to set a particularly low domestic price for their product. © 1995

Network neutrality and the nature of competition between network operators

Network neutrality, Discriminating practices, Product differentiation, Imperfect competition, Regulation,

Efficient interconnection charges and capacity-based pricing

Bill and keep, Capacity based interconnection, One-way interconnection, Telecommunications, Two-way interconnection, L51, L96,

Optimal access regulation with downstream competition

We analyze the setting of access prices for a bottleneck facility where the facility owner also competes in the deregulated downstream market. We consider a continuum of market structures from Cournot to Bertrand. These market structures are fully characterized by a single parameter representing the intensity of competition. We first show how the efficient component pricing rule should be modified as the downstream competitive intensity changes. We then analyse the optimal access price where a regulator trades off production efficiency and pro-competitive effects to maximize total surplus