Coasean Quality of Regulated Goods

Marian Moszoro

The B.E. Journal of Economic Analysis & Policy, 2016, vol. 16, issue 4, 13

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 (search for similar items in EconPapers)
JEL-codes: H41 H54 L15 L43 L51 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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DOI: 10.1515/bejeap-2014-0019

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