Externalities, Monopoly and the Objective Function of the Firm

David Kelsey and Frank Milne

No 604, Discussion Papers from University of Exeter, Department of Economics

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 maximizing 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)
Date: 2006-06
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Citations: View citations in EconPapers (6)

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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 (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:0604

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