Reexamination of the A-J effect

Michael Caputo and M. Hossein Partovi

Economics Bulletin, 2002, vol. 12, issue 10, 1-9

Abstract: We establish four necessary and sufficient conditions for the existence of the Averch-Johnson effect in a generalized version of their famous model of the rate-of-return regulated firm. The four necessary and sufficient conditions are then compared to the two stronger sufficient conditions for the Averch-Johnson effect found in the literature. Our analysis also permits us to put to rest a somewhat protracted debate about the very existence of the Averch-Johnson effect.

JEL-codes: L2 L5 (search for similar items in EconPapers)
Date: 2002-08-28
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Citations: View citations in EconPapers (1)

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