Article(electronic)July 21, 2016

Coasean Quality of Regulated Goods

In: The B.E. journal of economic analysis & policy, Volume 16, Issue 4

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Abstract

Abstract
The quality of goods provided by public utilities depends on infrastructure features and operational inputs. I compare the economic efficiency that results from price ceilings and minimum quality standards (i. e., compliance with environmental, chemical, and performance standards and norms) imposed by a benevolent regulator to a Coasean bargaining solution between a median consumer and a monopolist. When quality is non-excludable and non-rival, rate-of-return regulation yields higher economic efficiency than price cap regulation.

Languages

English

Publisher

Walter de Gruyter GmbH

ISSN: 1935-1682

DOI

10.1515/bejeap-2014-0019

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