Externalities, monopoly and the objective function of the firm
AbstractThis paper provides a theory of general equilibrium with externalities and/or monopoly. We assume that the firm's decisions are based on the preferences of shareholders and/or other stakeholders. Under these assumptions, a firm will produce fewer negative externalities than the comparable profit maximizing firm. In the absence of externalities, equilibrium with a monopoly will be Pareto efficient if the firm can price discriminate. The equilibrium can be implemented by a 2-part tariff.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 29 (2006)
Issue (Month): 3 (November)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Frank Milne & David Kelsey, 2005. "Externalities, Monopoly and the Objective Function of the Firm," Working Papers 1078, Queen's University, Department of Economics.
- David Kelsey & Frank Milne, 2006. "Externalities, Monopoly and the Objective Function of the Firm," Discussion Papers 0604, Exeter University, Department of Economics.
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
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