A Theory of Yardstick Competition
提出一种机制，将受规制企业的价格与同类企业的成本挂钩，从而激励垄断企业实现社会最优的成本削减，并推广到可观测差异的异质性企业。
In the typical regulatory scheme a franchised monopoly has little incentive to reduce costs. This article proposes a mechanism in which the price the regulatedfirm receives depends on the costs of identical firms. In equilibrium each firm chooses a socially efficient level of cost reduction. The mechanism generalizes to cover heterogeneous firms with observable differences. Medicare's prospective reimbursement of hospitals by using diagnostically related groups is a scheme very similar to the one outlined here.