Journal article icon

Journal article

Tight Average Revenue Regulation Can Be Worse Than No Regulation.

Abstract:
Price regulation of a multimarket monopolist, with the cap based on average revenue, can cause welfare to be below the unregulated level. In a model with linear demands and constant but unequal marginal costs, a sufficient condition for this welfare effect is that the cap equals the average revenue that would be earned with marginal cost pricing. Relaxation of the price cap can lower all prices. Welfare with uniform pricing at the level of the price cap can be above or below the average revenue welfare level.

Actions


Authors


Simon G Cowan More by this author
Journal:
Journal of Industrial Economics
Volume:
45
Publication date:
1997
URN:
uuid:1e1c3ded-6ca5-4693-a686-4f2e6203b69b
Local pid:
oai:economics.ouls.ox.ac.uk:10996
Language:
English

Terms of use


Metrics



If you are the owner of this record, you can report an update to it here: Report update to this record

TO TOP