The authors examine the welfare properties of surplus maximization by embedding a perfectly discriminating monopoly in an otherwise standard Arrow-Debreu economy. Although they discover an inefficient equilibrium, the authors validate partial equilibrium intuition by showing that equilibria are efficient provided that the monopoly goods are costly and that a natural monopoly can typically use personalized two-part tariffs in these equilibria. However, they find that Pareto optima are sometimes incompatible with surplus maximization, even when transfer payments are used. The authors provide insight into the source of this difficulty and give some instructive examples of economies where a second welfare theorem holds.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Publisher Info
Article provided by Econometric Society in its journal Econometrica.
Volume (Year): 66 (1998) Issue (Month): 4 (July) Pages: 897-922 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)