Starting from an industry where production is provided by a public monopolist, we look at the effects on the consumers’ surplus of a sequence of reforms in network industry. Using a simple comparative statics framework, we find indifference conditions in consumers’ surplus between respectively public monopoly, unregulated private monopoly, regulated private monopoly, vertically disintegrated monopoly, duopoly and liberalized market. The results are determined by the relative size of the x-inefficiencies of the public monopolist, allocative inefficiencies of private monopoly, the cost of unbundling and costs related to establishing a competitive market.
A primer on the welfare eects of regulatory reforms in network industries / L. Ceriani, M. Florio. - [s.l] : Università degli studi di Milano, 2008 Jul. (WORKING PAPER SERIES / DIPARTIMENTO DI ECONOMIA POLITICA E AZIENDALE, UNIVERSITÀ DEGLI STUDI DI MILANO)
A primer on the welfare eects of regulatory reforms in network industries
L. Ceriani;M. Florio
2008
Abstract
Starting from an industry where production is provided by a public monopolist, we look at the effects on the consumers’ surplus of a sequence of reforms in network industry. Using a simple comparative statics framework, we find indifference conditions in consumers’ surplus between respectively public monopoly, unregulated private monopoly, regulated private monopoly, vertically disintegrated monopoly, duopoly and liberalized market. The results are determined by the relative size of the x-inefficiencies of the public monopolist, allocative inefficiencies of private monopoly, the cost of unbundling and costs related to establishing a competitive market.File | Dimensione | Formato | |
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