Externalities, Monopoly And The Objective Function Of The Firm

David Kelsey and Frank Milne

No 1078, Working Paper from Economics Department, Queen's University

Abstract: This paper provides a theory of general equilibrium with externalities and/or monopoly. We assume that the firm's decisions are based on the preferences of shareholders and/or other stakeholders. Under these assumptions a firm will produce fewer negative externalities than the comparable profit maximising firm. In the absence of externalities, equilibrium with a monopoly will be Pareto efficient if the firm can price discriminate. The equilibrium can be implemented by a 2-part tariff.

Keywords: Externality; general equilibrium; 2-part tariff; objective function of the firm (search for similar items in EconPapers)
JEL-codes: D52 D70 L20 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2005-05
New Economics Papers: this item is included in nep-bec and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1078.pdf First version 2005 (application/pdf)

Related works:
Journal Article: Externalities, monopoly and the objective function of the firm (2006)
Working Paper: Externalities, Monopoly and the Objective Function of the Firm (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:1078

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