Footloose Monopolies: Regulating a 'National Champion'

38 Pages Posted: 29 May 2008  

Giacomo Calzolari

University of Bologna

Carlo Scarpa

University of Brescia; NERA Economic Consulting

Multiple version iconThere are 2 versions of this paper

Date Written: August 2007

Abstract

We analyze the design of optimal regulation of a domestic monopolist that also competes in an unregulated foreign market. We show how foreign activities by the regulated firm affect domestic regulation, consumers' surplus and firm's profits. Although expansion in unregulated foreign markets amplifies the regulatory distortions that are caused by the regulator's limited information, we also show that allowing the firm to compete abroad does not necessarily harm domestic consumers and we analyze if and when the firm's decision to expand abroad does in fact coincide with consumers' interests in the regulated market.

Keywords: Foreign Competition, Multinational Enterprises, National Champions, Regulation

JEL Classification: F23, L51

Suggested Citation

Calzolari, Giacomo and Scarpa, Carlo, Footloose Monopolies: Regulating a 'National Champion' (August 2007). , Vol. , pp. -, 2007. Available at SSRN: https://ssrn.com/abstract=1138526

Giacomo Calzolari (Contact Author)

University of Bologna ( email )

Piazza Scaravilli 2
I-40126 Bologna
Italy
0039 051 2098489 (Phone)
0039 051 2098493 (Fax)

HOME PAGE: http://www2.dse.unibo.it/calzolari/

Carlo Scarpa

University of Brescia ( email )

Via San Faustino 74B
Dipartimento di Scienze Economiche
25122 Brescia
Italy
+39+030+2988+833 (Phone)
+39+030+2988+839/840 (Fax)

NERA Economic Consulting ( email )

50 Main Street, 14th Floor
White Plains, NY 10606
United States

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