Steinar Vagstad | University of Bergen (original) (raw)

Papers by Steinar Vagstad

Many goods and services are priced non-linearly, and a common way to implement nonlinear price sc... more Many goods and services are priced non-linearly, and a common way to implement nonlinear price schedules is to let consumers choose from a menu of two-part tariffs. If consumers know their demand at the time they choose tariff, there is often no principal difference between a fully nonlinear shedule and a (rich enough) menu of two-part tariffs. When consumers do not know their exact demand the two are not equivalent, and this paper analyzes the pros and cons of forcing the consumers to choose tariff before they learn their demand.

Tornell (1991) analyzes how strategic investment behavior by the protected …rm renders the optima... more Tornell (1991) analyzes how strategic investment behavior by the protected …rm renders the optimal employment-enhancing industrial policy time inconsistent when the government's demand for employment is perfectly inelastic and the product de- mand is perfectly elastic. By allowing more general functions in describing the gov- ernment's demand for employment, we show that time inconsistency prevails, but that its cause changes from strategic behavior by the …rm to governmental opportunism. Moreover, we show that the form of the time inconsistency problem depend on de- mand conditions and production technology, and that increasing the number of plants of the regulated monopoly may increase the time inconsistency problem. (102 words)

In non-cooperative family models, being good at contributing to family public good like household... more In non-cooperative family models, being good at contributing to family public good like household production may reduce one's utility, since it tends to crowd out contributions from one's spouse. Similar effects also arise in cooperative models with non-cooperative threat point: improved contribution productivity entails loss of bargaining power.

Contributions to Economics, 1996

ABSTRACT Regulated firms are not necessarily willing to invest in cost minimizing technologies, b... more ABSTRACT Regulated firms are not necessarily willing to invest in cost minimizing technologies, but evaluate different technologies according to their impact on the information rent. In a two-type adverse selection model three kinds of investments are considered: investments that increase the probability of having low costs; investments that reduce the cost of low-cost types; and investments that reduce the cost of high-costs types.

Journal of Public Economics, 1995

If a government cares for local firms' profit, but not for foreign firms', foreign firms will be ... more If a government cares for local firms' profit, but not for foreign firms', foreign firms will be discriminated against when competing for government procurement contracts. Foreign firms will be chosen less often and, when chosen, earn less profit than local firms. We analyze a more central authority's policies against such discrimination given a situation in which a government has private information on product quality, and the competing firms have private information on own costs. Necessary and sufficient conditions for free revelation of quality information are derived. Finally, optimal policy when these conditions are not satisfied is characterized and discussed.

Journal of Population Economics, 2001

. In non-cooperative family models, being good at contributing to family public goods like hous... more . In non-cooperative family models, being good at contributing to family public goods like household production may reduce one's utility, since it tends to crowd out contributions from one's spouse. Similar effects also arise in cooperative models with non-cooperative threat point: improved contribution productivity entails loss of bargaining power. This strategic effect must be traded against the benefits of household

International Journal of Industrial Organization, 2000

Should the government procure equipment for its agencies or let them run their own procurement au... more Should the government procure equipment for its agencies or let them run their own procurement auctions? Suppose the agency has private information about product quality, but is inclined to favour local suppliers. Decentralization saves bureaucracy and ''agency costs'' (costs tied to truthful revelation of quality information), but leads to biased decisions (a discriminatory auction). I show that the costs associated with discrimination may increase when the quality differences (or the probability that the agency knows the quality) increase. Moreover, this effect may be dominant, implying that increased importance of local information may be an argument for centralization.

International Journal of Industrial Organization, 2007

Consider an auction in which potential bidders must sink an entry investment before learning thei... more Consider an auction in which potential bidders must sink an entry investment before learning their values, but where the auction designer can release information so that the bidders learn their values before entry. Such early information will induce screening of high-value bidders, and it will give rise to information rents and thereby a difference between the socially optimal auction and the auctioneer's preferred mechanism. Therefore, the auction designer has too weak an incentive to produce early information. Early information may increase or reduce equilibrium entry. If entry is sufficiently reduced, early information will harm the auction designer.

Nipe Working Papers, 2012

Received literature have shown that if competing Telecom networks are restricted to linear pricin... more Received literature have shown that if competing Telecom networks are restricted to linear pricing and are unable to discriminate between on-and off-net calls, high access charges can be a device for facilitating collusion.

Econometric Society 2004 Australasian Meetings, Sep 11, 2004

Http Dx Doi Org 10 3790 Aeq 54 3 203, Oct 12, 2011

We review the recent literature on mobile termination rates (MTR) in mobile communication network... more We review the recent literature on mobile termination rates (MTR) in mobile communication networks (M2M). This literature shows that mobile networks may have incentives to charge ine¢ cient high termination charges leading to reduced surplus for consumers and society, and therefore should be regulated. We discuss optimal regulation of MTRs and the two main objectives behind current regulation: excessive pricing and entry assistance. We also present a sketch of a new regulatory regime for the mobile industry.

Consider a model with two types of jobs. The pro…tability of promoting a worker to a fast-track j... more Consider a model with two types of jobs. The pro…tability of promoting a worker to a fast-track job depends not only on his or her observable talent, but also on incontractible e¤ort. We investigate whether self-ful…lling expectations may lead to higher promotion standards for women. If employers expect women to do more household work than men, thereby exerting less e¤ort in their paid job, then women must be more talented to make promotion pro…table. Moreover, specialization in the family will then result in women's doing most of the household work. Such self-ful…lling prophecies can be defeated: both a¢ rmative action and family policy can make women spend more e¤ort in the market, which can lead the economy to a non-discriminatory equilibrium.

It is well-known that switching costs may facilitate monopoly pricing in a market with price comp... more It is well-known that switching costs may facilitate monopoly pricing in a market with price competition between two suppliers of a homogenous good, provided the switching cost is above some critical level. With heterogeneous consumers monopoly pricing entails second degree price differentiotation with inefficient contracts for low demand types. We show that introducing consumer heterogeneity may increase the critical switching cost needed to sustain a pure-strategy equilibrium involving monopoly pricing.

It is often said that modern working women have a double bur- den and work harder (paid and unpai... more It is often said that modern working women have a double bur- den and work harder (paid and unpaid seen together) than women did earlier. In a non-cooperative family model it is shown that double burdens may be a consequence of restrictions on working hours. This result also hold in a cooperative model with non- cooperation as the threat point. Moreover, the more equal are wages, the more likely it will be that working hours restrictions will benefit men and harm women.

Consider a principal-agent model in which the agent must sink an investment before the contract i... more Consider a principal-agent model in which the agent must sink an investment before the contract is written. If the agent has private information (e.g. about production costs), this may give rise to an information rent that is sometimes large enough to resolve the inherent holdup problem. In this paper the importance of the information timing is analyzed. Does it matter whether the agent learns his private information before or after investment? 'Early' product cost information has two effects on investments. First, when the agent receives (some) production cost information before investing, the high-cost types of the agent will be less willing to invest than the low-cost types. The direct effect will trigger a signaling effect: if low-cost types invest and high-cost types do not, then investment is a sign of low costs, leading the principal to offer a less favorable contract for the agent. The signaling effect will always increase the holdup-problem, while the direct effect ...

We examine the optimal regulation of agricultural markets when farmers have organized their activ... more We examine the optimal regulation of agricultural markets when farmers have organized their activity in a cooperative which is the monopoly supplier of an upstream product and which competes with a single rival firm in selling a homogenous downstream product. The rival's marginal cost is private information and therefore the rival expects to earn an information rent. We show that the optimal access price discriminates against the private rival because rent is more valuable in the cooperative than in the private firm, and the regulator therefore sacrifices some cost efficiency in order to shift rents. Thus, while competition will benefit farmers, consumers and tax payers, the extent of competition should optimally be somewhat limited.

Journal of Economic Behavior & Organization, 2015

Typically, mobile telephony networks overcharge each other for termina- tion of incoming calls, l... more Typically, mobile telephony networks overcharge each other for termina- tion of incoming calls, leading to too high prices of o¤-net tra¢ c. Received theory, in contrast, claims that this behaviour reduces pro…ts: high termina- tion charges make …rms set high marginal prices, but the subscription fees must be reduced even more. This paper bridges this gap between theory and reality: people do not place their calls randomly, and this feature may make high termination charges pro…table. Moreover, if incumbents are threatened by entry, high termination prices are always pro…table, whether to deter or soften the entrants. Finally, implications for EU regulation are discussed. � This research has been sponsored by Telenor, through the Institute for Research in Economics and Business Administration. Parts of this article was written while the authors were visiting UC Berkeley, whose hospitality is gratefully acknowlegded. Earlier versions of this article have been presented at the CEPR Co...