IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v86y1996i1-2p1-15.html
   My bibliography  Save this article

Contestability, Queues, and Governmental Entry Deterrence

Author

Listed:
  • Shmanske, Stephen

Abstract

This paper demonstrates that a perverse kind of entry deterrence can result when government subsidized production is combined with non-price rationing in the form of queuing. Even though queuing leads to a total cost to the consumer (not including the tax cost) that is higher than the cost of an unsubsidized private supplier, and even though the government's money price is rigid, the market is not contestable. The key to the result is that the waiting cost portion of the consumer's acquisition cost declines immediately upon entry and losses would be forced upon the entrant. Privatization would negate the entry deterrence, thus leading to entry, increased output at lower full prices, lower average production costs, decreased waiting costs, increased profits, and increased consumer surplus. Copyright 1996 by Kluwer Academic Publishers

Suggested Citation

  • Shmanske, Stephen, 1996. "Contestability, Queues, and Governmental Entry Deterrence," Public Choice, Springer, vol. 86(1-2), pages 1-15, January.
    • Handle: RePEc:kap:pubcho:v:86:y:1996:i:1-2:p:1-15
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below 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.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Robin Lindsey & André de Palma, 1997. "Private Toll Roads: A Dynamic Equilibrium Analysis," Tinbergen Institute Discussion Papers 97-057/3, Tinbergen Institute.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:86:y:1996:i:1-2:p:1-15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.