search query: @indexterm FLEXIBILITY / total: 403
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| Author: | Auriol, E. Picard, P.M. |
| Title: | Government outsourcing: public contracting with private monopoly |
| Journal: | Economic Journal
2009 : OCT, VOL. 119:540 p. 1464-1493 |
| Index terms: | budget regulations outsourcing markets flexibility technology |
| Language: | eng |
| Abstract: | The paper studies the influence of the government budget constraint on the regulation of natural monopolies in adverse selection contexts. The government maximizes 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 makes more flexibility possible than regulation where governments commit to both investment and operation cash-flows. This is particularly relevant in case of high technological uncertainties. |
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