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Public–Private Monopoly

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  • Moszoro Marian W.

    (George Mason University and Warsaw School of Economics, Interdisciplinary Center for Economic Science, 3434 Washington BlvdArlington, VA 22201, United States of America)

Abstract

This article presents comparative statics of organizational modes of natural monopoly in public utilities with a focus on co-ownership and co-governance. Private monopoly lowers output and increases the price to maximize profit; public monopoly incurs higher costs due to the lack of know-how; and a regulated monopoly results in regulation costs to overcome informational asymmetries. A public–private partnership arises as an efficient organization mode when it enables the internalization of private know-how and saves regulation costs due to correspondingly sufficient private and public residual control rights. Public–private partnerships support higher prices than marginal costs due to rent sharing, with its upper price frontier decreasing in private residual control rights.

Suggested Citation

  • Moszoro Marian W., 2018. "Public–Private Monopoly," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(2), pages 1-15, April.
    • Handle: RePEc:bpj:bejeap:v:18:y:2018:i:2:p:15:n:1
    DOI: 10.1515/bejeap-2016-0314
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    Cited by:

    1. Marian Moszoro & Gonzalo Araya & Fernanda Ruiz-Nuñez & Jordan Schwartz, 2015. "What Drives Private Participation in Infrastructure Developing Countries?," Palgrave Macmillan Books, in: Stefano Caselli & Guido Corbetta & Veronica Vecchi (ed.), Public Private Partnerships for Infrastructure and Business Development, chapter 0, pages 19-44, Palgrave Macmillan.
    2. Hanna Kociemska & Boguslaw Poltorak, 2021. "The Influence of Social Impact Bonds on Public–Private Partnership Success: The Case of Higher Education," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 423-438.

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    More about this item

    Keywords

    natural monopolies; operating efficiency; public–private partnerships; organization structure; regulation;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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