Proper Quadratic Cost Functions with an Application to the Bell System
When choosing a flexible functional form to model multioutput cost structures, one is quickly confronted with severe violations of certain regularity conditions over large regions of output space. This paper explicitly imposes regional properness on the parameter space of flexible functional forms. The apparent trade-off between functional flexibility and functional properness has been identified for the case of the quadratic cost function. Using the quadratic cost function, the proposed procedure is illustrated with an application to the Bell System. The results suggest that the telecommunication industry in the United States--prior to the Bell System break-up--was a natural monopoly. Copyright 1990 by MIT Press.
If you experience problems downloading a file, check if you have the proper application to view it first. 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 72 (1990)
Issue (Month): 2 (May)
|Contact details of provider:|| Web page: http://mitpress.mit.edu/journals/|
|Order Information:||Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535|
When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:72:y:1990:i:2:p:202-10. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Pollock-Nelson)
If references are entirely missing, you can add them using this form.