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An alternative to natural monopoly

Author

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  • Oriol Carbonell-Nicolau

    (Rutgers University)

Abstract

We consider a shared ownership arrangement among consumers/owners as a means to organize production with an underlying decreasing average cost function typical of natural monopolies. The resulting output allocation yields a lower deadweight loss than the monopoly allocation, and is, in some cases, efficient.

Suggested Citation

  • Oriol Carbonell-Nicolau, 2019. "An alternative to natural monopoly," Departmental Working Papers 201904, Rutgers University, Department of Economics.
    • Handle: RePEc:rut:rutres:201904
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    References listed on IDEAS

    as
    1. Baron, David P & Myerson, Roger B, 1982. "Regulating a Monopolist with Unknown Costs," Econometrica, Econometric Society, vol. 50(4), pages 911-930, July.
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    5. Oliver E. Williamson, 1976. "Franchise Bidding for Natural Monopolies -- in General and with Respect to CATV," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 73-104, Spring.
    6. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
    7. Brett M. Frischmann & Christiaan Hogendorn, 2015. "Retrospectives: The Marginal Cost Controversy," Journal of Economic Perspectives, American Economic Association, vol. 29(1), pages 193-206, Winter.
    8. Braeutigam, Ronald R., 1989. "Optimal policies for natural monopolies," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 23, pages 1289-1346, Elsevier.
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    More about this item

    Keywords

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    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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