Rivalrous Benefit Taxation: The Independent Viability of Separate Agencies or Firms

Aaron Edlin () and Mario Epelbaum
Additional contact information
Mario Epelbaum: Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM)

No 9303, Working Papers from Centro de Investigacion Economica, ITAM

Abstract: We ask when firms with increasing returns can cover their costs independently by charging two-part tariffs (TPT's)---a condition we call independent viability. To answer, we develop notions of substitutability and complementarity that account for the total value of goods and use them to find the maximum extractable surplus. We then show that independent viability is a sufficient condition for existence of a general equilibrium in which regulated natural monopolies use TPT's. Independent viability also guarantees efficiency when the increasing returns arise solely from fixed costs. For arbitrary technologies, it ensures that a Second Welfare Theorem holds.

Pages: 42 pages
Date: 1993-10
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Rivalrous Benefit Taxation: The Independent Viability of Separate Agencies or Firms (1995)
Working Paper: Rivalrous Benefit Taxation: The Independent Viability of Separate Agencies or Firms (1993)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cie:wpaper:9303

Access Statistics for this paper

More papers in Working Papers from Centro de Investigacion Economica, ITAM Contact information at EDIRC.
Bibliographic data for series maintained by Diego Dominguez ().