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Please use this identifier to cite or link to this item: http://hdl.handle.net/10077/6859

Title: Deregulating the economy: centralized vs. market - like systems. The principal-agent perspective applied to the transport sector
Authors: Mazzarino, Marco
Keywords: incentives
information asymmetry
competitive market
market failures
coordination mechanisms
theory of contracts
Issue Date: 2000
Publisher: EUT Edizioni Università di Trieste
ISTIEE Istituto per lo studio dei trasporti nell’integrazione economica europea
Citation: Marco Mazzarino, "Deregulating the economy: centralized vs. market - like systems. The principal-agent perspective applied to the transport sector", in: European Transport / Trasporti Europei, VI (2000) 14, pp. 44-50
Series/Report no.: European Transport / Trasporti Europei
VI (2000) 14
Abstract: In the paper, the existence of coordination mechanisms capable of achieving Pareto efficiency under uncertainty conditions (information asymmetry) is investigated. Referring to the deregu¬lation processes under way within the transport system, coordination mechanisms are modelled as principal-agent relationships, public sector being the principal and private operators being agents. It is shown that optimum incentive-compatible mechani¬sms (Nash equilibria) in a deregulated system leads to an inefficient allocation of resources unless agents are risk-neutral. It is also shown that using information as a strategic resource there is some room for efficiency improvement by monitoring agents and by repeating the agency relationship over time.
URI: http://hdl.handle.net/10077/6859
ISSN: 1129-5627
Appears in Collections:European Transport / Trasporti Europei (2000) 14/VI

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