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Financing a nationalized monopoly: Coase's versus hotelling-lerner's solution

Author

Listed:
  • Ramón José Torregrosa Montaner

    (Universidad de Salamanca)

Abstract

Coase (1946) rejected the superiority of Hotelling-Lemer solution upon average-cost pricing in face to fmance a nationalized monopoly due to taxes being distortionary. In this paper, we show that this conjecture is not general1y true. According to the utilitarian criterion, we find a distortionary Hotelling-Lel'l1er tax policy which improves upon the average cost pricing. Coase (1946) rechazó la superioridad de la solución de Hotelling-Lemer sobre el equilibrio precio-coste medio debido a la distorsión causada por los impuestos. En este trabajo se muestra que esta conjetura no es cierta en general. Encontrando que, de acuerdo con el criterio utilitarista, es posible una política fiscal Hotelling-Lel'l1er distorsionante que mejora el equilibrio precio-coste medio.

Suggested Citation

  • Ramón José Torregrosa Montaner, 1996. "Financing a nationalized monopoly: Coase's versus hotelling-lerner's solution," Working Papers. Serie EC 1996-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasec:1996-16
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-1996-16.pdf
    File Function: Fisrt version / Primera version, 1996
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