Coasean Quality of Regulated Goods

Moszoro, Marian (2016): Coasean Quality of Regulated Goods. Published in: The B.E. Journal of Economic Analysis & Policy , Vol. 16, No. 4 (October 2016): pp. 1-13.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Public Goods, Network Infrastructure, Regulation of Quality, Coase Theorem
• Subjects: H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality ; Standardization and Compatibility; L - Industrial Organization > L4 - Antitrust Issues and Policies > L43 - Legal Monopolies and Regulation or Deregulation; L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation

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