Do welfare maximising water utilities maximise welfare under common carriage?
Due to the increasing discussion about liberalisation in the piped water industry municipal authorities in several European countries consider modifications of their water utilities’ structure such as legal constitution, business objectives or private participation. The purpose of this paper is to evaluate the extent to which it is socially optimal to compose water utilities as welfare or profit maximising companies when assuming the introduction of competition in the market based on common carriage – as applied in England and Wales. Using a game theoretic model of mixed oligopolies that contains water markets specificities we show that welfare tends to be higher in a regime, where utilities are instructed to maximise profits rather than welfare.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- De Fraja, Giovanni, 1991. "Efficiency and Privatisation in Imperfectly Competitive Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 39(3), pages 311-21, March.
- Reto Foellmi & Urs Meister, 2004.
"Enhancing Efficiency of Water Supply – Product Market Competition versus Trade,"
- Reto Foellmi & Urs Meister, 2004. "Enhancing Efficiency of Water Supply - Product Market Compoetition versus Trade," Working Papers 0025, University of Zurich, Institute for Strategy and Business Economics (ISU).
- Ephraim Clark & Gérard Mondello, 2000. "Water Management in France: Delegation and Irreversibility," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 325-352, November.
- Michael Webb & David Ehrhardt, 1998. "Improving Water Services Through Competition," World Bank Other Operational Studies 11511, The World Bank.
- Cowan, Simon, 1997. "Competition in the Water Industry," Oxford Review of Economic Policy, Oxford University Press, vol. 13(1), pages 83-92, Spring.
- Richard G. Harris & Elmer G. Wiens, 1980. "Government Enterprise: An Instrument for the Internal Regulation of Industry," Canadian Journal of Economics, Canadian Economics Association, vol. 13(1), pages 125-32, February.
- Cowan, Simon, 1993. "Regulation of Several Market Failures: The Water Industry in England and Wales," Oxford Review of Economic Policy, Oxford University Press, vol. 9(4), pages 14-23, Winter.
- Hagen, Kare P, 1979. " Optimal Pricing in Public Firms in an Imperfect Market Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(4), pages 475-93.
- Cremer, H. & Marchand, M. & Thisse, J.-F., 1987.
"The public firm as an instrument for regulating an oligopolistic market,"
CORE Discussion Papers
1987010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1989. "The Public Firm as an Instrument for Regulating an Oligopolistic Market," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 283-301, April.
- CREMER, Helmuth & MARCHAND, Maurice & THISSE, Jacques-François, . "The public firm as an instrument for regulating an oligopolistic market," CORE Discussion Papers RP 832, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-11, April.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpot:0505001. 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: (EconWPA)
If references are entirely missing, you can add them using this form.