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Regulating the Anticommons: Insights from Public-Expenditure Theory


  • Matt Van Essen

    () (Department of Economics, Finance, and Legal Studies, University of Alabama, 200 Alston Hall, 361 Stadium Dr., Box 870224, Tuscaloosa, AL 35487;)


This article offers a new interpretation of the traditional Cournot complements problem, or anticommons, by using the theory of public goods to gain a perspective on the problem. Specifically, I examine the pricing strategies and regulation of multiple monopolies that produce products which consumers view as perfect complements. I show that collusion by the firms increases total social welfare and that the collusion problem can be reinterpreted as a problem of provision of public goods from the point of view of the firms. I take this insight further and derive the familiar concepts of the Samuelson marginal condition and the ratio equilibrium for the firms. I compare these outcomes to the first best solution and then apply incentive-compatible mechanisms to strategically implement the Pareto superior ratio-equilibrium outcome and the optimal marginal-cost pricing outcome. Finally, I show how this methodology can be applied to the more familiar Cournot model of oligopoly.

Suggested Citation

  • Matt Van Essen, 2013. "Regulating the Anticommons: Insights from Public-Expenditure Theory," Southern Economic Journal, Southern Economic Association, vol. 80(2), pages 523-539, October.
  • Handle: RePEc:sej:ancoec:v:80:2:y:2013:p:523-539

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    Cited by:

    1. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods


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