Coasean Quality of Regulated Goods

B.E. Journal of Economic Analysis & Policy Vol. 16, No. 4, 2016

15 Pages Posted: 6 Nov 2014 Last revised: 6 May 2018

See all articles by Marian W. Moszoro

Marian W. Moszoro

George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES); Warsaw School of Economics (SGH)

Multiple version iconThere are 2 versions of this paper

Date Written: June 29, 2016

Abstract

The quality of goods provided by public utilities depends on infrastructure features and operational inputs. I compare the economic efficiency that results from price ceilings and minimum quality standards (i.e., compliance with environmental, chemical, and performance standards and norms) imposed by a benevolent regulator to a Coasean bargaining solution between a median consumer and a monopolist. When quality is non-excludable and non-rival, rate-of-return regulation yields higher economic efficiency than price cap regulation.

Keywords: Public Goods, Network Infrastructure, Regulation of Quality, Coase Theorem

JEL Classification: H41, H54, L15, L43, L51

Suggested Citation

Moszoro, Marian W., Coasean Quality of Regulated Goods (June 29, 2016). B.E. Journal of Economic Analysis & Policy Vol. 16, No. 4, 2016. Available at SSRN: https://ssrn.com/abstract=1729646 or http://dx.doi.org/10.2139/ssrn.1729646

Marian W. Moszoro (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/mmoszoro

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

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