Incentive Monopoly Regulation with Entry

This paper analyzes the non-dichotomy nature of the entry and the price regulations under asymmetric information. When current market is a monopoly and there is a potential entrant, the government should make decisions both on the monopoly (price) regulation and on the entry regulation simultaneously. In this case, if information is incomplete, entry and price regulations should be incentive compatible not only individually but also jointly against each other. An integrated incentive regulation which incorporates entry and price regulations at the same time is derived for the comprehensive analysis of the monopoly regulation under asymmetric information.