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Prices versus Quantities Reconsidered

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  • Brozovic, Nicholas
  • Sunding, David L.
  • Zilberman, David

Abstract

In comparing second-best prices and quantities, studies assume that quantities bind with probability one. We present a more general and realistic model of second-best regulation where quantity instruments can bind with probability less than one. This additional flexibility of quantity instruments makes them much more efficient than previously realized.

Suggested Citation

  • Brozovic, Nicholas & Sunding, David L. & Zilberman, David, 2004. "Prices versus Quantities Reconsidered," 2004 Annual meeting, August 1-4, Denver, CO 20257, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20257
    DOI: 10.22004/ag.econ.20257
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    References listed on IDEAS

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    Cited by:

    1. Karp, Larry & Zhang, Jiangfeng, 2003. "Regulation of Stock Externalities with Correlated Costs," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9cj2k41m, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Costello, Christopher & Karp, Larry, 2004. "Dynamic taxes and quotas with learning," Journal of Economic Dynamics and Control, Elsevier, vol. 28(8), pages 1661-1680, June.
    3. Heyes, Anthony & Kapur, Sandeep, 2011. "Regulatory attitudes and environmental innovation in a model combining internal and external R&D," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 327-340, May.
    4. Larry Karp & Jiangfeng Zhang, 2005. "Regulation of Stock Externalities with Correlated Abatement Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(2), pages 273-300, October.
    5. Kellogg, Ryan, 2018. "Gasoline price uncertainty and the design of fuel economy standards," Journal of Public Economics, Elsevier, vol. 160(C), pages 14-32.

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