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Chinese Journal of Management Science ›› 2014, Vol. 22 ›› Issue (5): 91-97.

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The Incentive Compatibility Price Model of Transmission and Distribution under Asymmetric Information

CAI Jian-gang1, YE Ze2   

  1. 1. School of Tourism and Management Project, Jishou University, Zhangjiajie 427000, China;
    2. School of Economics and Management, Changsha University of Science and Technology, Changsha 410114, China
  • Received:2011-10-20 Revised:2013-04-01 Online:2014-05-20 Published:2014-05-14

Abstract: There is an asymmetric information between government and enterprise of transmission and distribution. However, government can design a set of incentive compatible mechanism to induce enterprise reporting cost honestly through introducing three policy instruments which are price, transmission capacity and transfer payment. The regulation pricing model of transmission and distribution enterprise based on incentive compatible mechanism not only safeguards the consumers' interests, but also ensures the transmission and distribution enterprise without losing. When the government regards the profit of transmission and distribution enterprise and the surplus of consumer as of equal importance, the price will be equal to marginal cost, and resources will be optimal configuration. At the same time, the enterprise will receive maximization profits. The model used in this paper provides theoretical and practical guidance for pricing mechanism of our transmission and distribution price.

Key words: asymmetric information, transmission and distribution price, regulation, incentive compatibility

CLC Number: