Equilibrium Investment in an Industry with Moderate Investment Economies of Scale
AbstractThe authors investigate a stationary equilibrium investment sequence in an industry where the costs of investment display initial economies of scale, but eventually decreasing returns to scale. Both the timing and size of new investments are choice variables, and they allow the industry structure to be as competitive as one could imagine given the cost conditions. The authors argue that competitive private firms will make new investments that are too early and too small. Their results have implications for the likely performance of industries, such as electricity, telecommunications, gas, and water supply, after deregulation or privatization. Copyright 1989 by Royal Economic Society.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 99 (1989)
Issue (Month): 396 (June)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.