Pricing and Price Regulation: An Economic Theory for Public by D. Bös

By D. Bös

This transparent, accurately written textual content provides an enormous department of the trendy, micro-economically established thought of business association and of public finance, using calculus only.

Answers are supplied to a couple pertinent fiscal questions, corresponding to the pricing guidelines of vote-seeking politicians, of empire-building bureaucrats and of out-put-maximizing and energy-saving public utilities. those regulations are in comparison with the welfare financial benchmark principles e.g. on marginal price pricing and Ramsey pricing. nice value is connected to cost regulation.

The publication elucidates the hot alternative of price of go back law via price-cap legislation. It additionally explains why many easy ideas like yardstick law fail to accomplish optimum costs, which indicates how advanced it's to urge managers to in truth display their deepest info. How this is completed correctly is proven in a number of principal-agent versions on legislation with doubtful charges, doubtful call for and with smooth funds constraints.

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Additional info for Pricing and Price Regulation: An Economic Theory for Public Enterprises and Public Utilities (Advanced Textbooks in Economics)

Sample text

The UK privatizations are of particular interest because they not only included competitive industrial firms, but also public utilities like telecommunications, gas, and electricity, which in Europe had always been considered to be central areas of public-enterprise activity. 37 As such, it is the precise reverse of nationalization. Neither procedure is embarked upon primarily for economic reasons, though 32 For details see Smekal (1963), Koren (1964). The reader may be interested to learn the rest of the (hi)story.

After all, they had to be elected and reelected, thus their policies reflected the opinions of the majority of voters. These opinions have also been shaped by the economists' profession. In the eighties the opinions of many public economists began intensively to deviate from the Musgravian view which had long been prevalent. The allocation of resources became the field of central interest. Tax theory concentrated nearly exclusively on how to reduce the disincentives from taxation. Theories of public enterprises similarly began to concentrate on the question of how a regulating government could give the best incentives for efficient production in the firm.

Second, it is a special introduction into the 'pricing' parts of the book, hence it mainly concentrates on a full-information approach1 and not on special problems of asymmetric information.

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