A coasean general equilibrium model of regulation

@article{Clay1994ACG,
  title={A coasean general equilibrium model of regulation},
  author={K. Clay},
  journal={Journal of Public Economics},
  year={1994},
  volume={53},
  pages={459-475}
}
  • K. Clay
  • Published 1994
  • Economics
  • Journal of Public Economics
  • Abstract Although marginal cost pricing is necessary for welfare maximization, firms that produce under conditions of decreasing average cost incur losses if they price at marginal cost. In this paper, the Coase two-part tariff is extended to several cases of common costs by assessing surplus in order to recover the losses of the regulated natural monopolist; the existence of equilibria in these cases is demonstrated. Three models are considered in the context of an Arrow–Debreu private… CONTINUE READING
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