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An alternative to natural monopoly

Author

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  • Oriol Carbonell-Nicolau

    (Rutgers University)

Abstract

We consider a shared ownership arrangement among consumers/owners as a means to organize production with an underlying decreasing average cost function typical of natural monopolies. The resulting output allocation yields a lower deadweight loss than the monopoly allocation, and is, in some cases, efficient.

Suggested Citation

  • Oriol Carbonell-Nicolau, 2019. "An alternative to natural monopoly," Departmental Working Papers 201904, Rutgers University, Department of Economics.
    • Handle: RePEc:rut:rutres:201904
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    File URL: http://www.sas.rutgers.edu/virtual/snde/wp/2019-03.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    natural monopoly; deaweight loss from monopoly; decreasing average costs;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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