Starting from an industry where production is provided by a public monopolist, we observe the effects of a sequence of reforms within the network industry on consumer surplus. Using a simple comparative statics framework, we find the indifference conditions for the consumer surplus under the following regimes: a public monopoly, an unregulated private monopoly, a regulated private monopoly, a vertically disintegrated monopoly, a duopoly and a liberalized market. The results are determined by the relative size of the x-inefficiencies of the public monopolist, allocative inefficiencies of the private monopoly, the cost of unbundling and the costs related to establishing a competitive market.

Consumer Surplus and the Reform of Network Industries: a Primer

CERIANI, LIDIA;
2011

Abstract

Starting from an industry where production is provided by a public monopolist, we observe the effects of a sequence of reforms within the network industry on consumer surplus. Using a simple comparative statics framework, we find the indifference conditions for the consumer surplus under the following regimes: a public monopoly, an unregulated private monopoly, a regulated private monopoly, a vertically disintegrated monopoly, a duopoly and a liberalized market. The results are determined by the relative size of the x-inefficiencies of the public monopolist, allocative inefficiencies of the private monopoly, the cost of unbundling and the costs related to establishing a competitive market.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11565/3718470
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