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A primer on the welfare effects of regulatory reforms in network industries

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Author Info
Lidia CERIANI ()
Massimo FLORIO ()

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Abstract

Starting from an industry where production is provided by a public monopolist, we look at the effects on the consumers' surplus of a sequence of reforms in network industry. Using a simple comparative statics framework, we find indifference conditions in consumers' surplus between respectively public monopoly, unregulated private monopoly, regulated private monopoly, vertically disintegrated monopoly, duopoly and liberalized market. The results are determined by the relative size of the x-inefficiencies of the public monopolist, allocative inefficiencies of private monopoly, the cost of unbundling and costs related to establishing a competitive market.

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Publisher Info
Paper provided by Department of Economics University of Milan Italy in its series Departemental Working Papers with number 2008-23.

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Date of creation: 08 Jul 2008
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Handle: RePEc:mil:wpdepa:2008-23

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Related research
Keywords: Privatization; unbundling; liberalization; network industries;

Find related papers by JEL classification:
D40 - Microeconomics - - Market Structure and Pricing - - - General
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out

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