ALTERNATIVE INSTITUTIONAL FRAMEWORKS FOR PRICE INCENTIVE MECHANISMS

JÖrg Finsinger and Ingo Vogelsa
Authors registered in the RePEc Author Service: Ingo Vogelsang

Kyklos, 1981, vol. 34, issue 3, 388-404

Abstract: The paper contains incentive mechanisms for the control of natural monopoly. They are based on the observation that government lacks information on industry costs and market demands which the managers of natural monopoly firms hold. Thus, all mechanisms only make use of publicly accessable information. They are all adjustment processes derived from the common principle to share the benefits of quantity weighted price reductions between the firm and the public. Differences between the mechanisms relate to their welfare objective and the institutional environment. Our findings show that the institutional environment does matter both as regards distributional consequences and the possibilities to reach efficient solutions.

Date: 1981
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https://doi.org/10.1111/j.1467-6435.1981.tb01196.x

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