Yardstick Competition to Elicit Private Information: An Empirical Analysis

Ayako Suzuki*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


The Japanese regulatory authority has introduced a new hybrid regulation that combines a fixed-price contract with ex ante yardstick inspection for local (public utility) gas distribution. The latter compares a firm's reported costs with those of 'similar' firms, and penalizes high-cost firms. We infer the effect of yardstick on information revelation by comparing the actual welfare level with the hypothetical full-information welfare level. Our results suggest that only the very first inspection was effective in reducing firms' incentive to report higher costs.

Original languageEnglish
Pages (from-to)313-338
Number of pages26
JournalReview of Industrial Organization
Issue number4
Publication statusPublished - 2012 Jun


  • Hidden information
  • Incentive regulation
  • Yardstick competition

ASJC Scopus subject areas

  • Economics and Econometrics
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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