This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Shadow Prices for a Nonconvex Public Technology in the Presence of Private Constant Returns

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
John A. Weymark () (Department of Economics, Vanderbilt University)

Additional information is available for the following registered author(s):

Abstract

Diamond and Mirrlees have shown that public sector shadow prices should be set equal to the private producer prices in some circumstances even if taxes are not optimal when the public production technology is convex and some of the private sector firms have constant-returns-to-scale technologies. In this article, it is shown that the optimal public production plan maximizes profits using the private producer prices on a subset of the public production set if this set is nonconvex. Sufficient conditions for profit maximization using these prices to identify the optimal public production plan on the whole public production set are also identified.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

File URL: http://www.vanderbilt.edu/Econ/wparchive/workpaper/vu05-w01.pdf
File Format: application/pdf
File Function: First version, 2005
Download Restriction: no

Publisher Info
Paper provided by Department of Economics, Vanderbilt University in its series Working Papers with number 0501.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:van:wpaper:0501

Contact details of provider:
Postal: Box 1819, Station B, Nashville, TN 37235
Fax: 615-343-8495
Email:
Web page: http://sitemason.vanderbilt.edu/econ/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Diana Weymark).

Related research
Keywords: Shadow prices; public sector pricing; Diamond and Mirrlees;

Find related papers by JEL classification:
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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.:
  1. Weymark, John A, 1981. "On Sums of Production Set Frontiers," Review of Economic Studies, Blackwell Publishing, vol. 48(1), pages 179-83, January. [Downloadable!] (restricted)
  2. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Bos, Dieter, 1985. "Public sector pricing," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 1, chapter 3, pages 129-211 Elsevier. [Downloadable!] (restricted)
  4. Diamond, P A & Mirrlees, James A, 1976. "Private Constant Returns and Public Shadow Prices," Review of Economic Studies, Blackwell Publishing, vol. 43(1), pages 41-47, February. [Downloadable!] (restricted)
    Other versions:
  5. repec:cup:cbooks:9780521629560 is not listed on IDEAS
  6. Moore, James C & Whinston, Andrew B & Wu, Joseph S, 1972. "Resource Allocation in a Non-convex Economy," Review of Economic Studies, Blackwell Publishing, vol. 39(3), pages 303-23, July. [Downloadable!] (restricted)
  7. Guesnerie, Roger, 1979. "General statements on second best pareto optimality," Journal of Mathematical Economics, Elsevier, vol. 6(2), pages 169-194, July. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? RePEc also has a blog.

This page was last updated on 2009-11-14.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.