Three essays in microeconomics of public enterprises under asymmetric information and uncertainty

In Chapter 1, we present a model describing the control of a single public enterprise in a less developed country environment, through the imposition of an allocation scheme--consisting of an output target at a particular unit cost--by a central planner. We assume information asymmetry with a private information bearing enterprise manager and an uninformed central planner. The central planner is treated as the principal and the manager is treated as an agent in a principal-agent model where incompatible interests arise because the manager is able to keep the information private; for his effort level in the production process cannot be observed by the central planner. Out of this situation, we characterize an incentive compatible contract which specifies two decision variables and a transfer payment. Results characterize a general class of two variable contracts imposed through a transfer payment. Among the specific results we find that there is excess variability in capacity utilization and that within the context of the contract the cost due to asymmetric information is minimal to the society if the actual productivity of the firm is high. The results depend on the assumed regularity conditions and are obtained for a continuous space.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2011

Author dc:creator

• Acharya, Arnab Kumar

Contributors dc:contributor

• Kahn, Charles M.

• Economics, Theory

Statement dc:rights

• Copyright 1989 Acharya, Arnab Kumar

Language dc:language

eng

Identifier

AAI9010789
(UMI)AAI9010789

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/20708