We study the choices of two types of maximizing Public Servants over how far to carry privatization of industries and in what order to privatize. Two stylizations of the Public Servant's objectives are considered, a Niskanen-style Bureaucrat who maximizes a surplus budget subject to the constraint of staying in office, and a Populist who maximizes popularity/consumer welfare subject to the cons...

The Telecommunications industry is usually characterised by low marginal costs and significant fixed costs which are the conditions for the inefficiency of marginal cost pricing. In such cases theory postulates that optimal pricing is obtained by maximising welfare subject to a restriction of viability of the firm: the second-best pricing scheme. The possible Welfare Losses due to second-best p...

FOREWORD The bylaws of The National Regulatory Research Instit~te state that among the purposes of the Institute is: • • • to carry out research and related activities directed to the needs of state-regulatory commissioners, to assist the state commissions with developing innovative solutions to state regulatory problems, and to address regulatory issues of national concern. This report-the fif...

I examine the behavior of inventories and their role in the short-run dynamics of commodity production and price. Competitive producers of a storable commodity react to price changes by balancing costs of changing production with costs of changing inventory holdings. To determine these costs, I estimate a structural model of production, sales, and storage for copper, heating oil, and lumber. I ...

We propose a continuous-time model of trading with heterogeneous beliefs. Risk-neutral agents face quadratic costs-of-carry on positions and thus their marginal valuation of the asset decreases with the size of their position, as it would be the case for risk-averse agents. In the equilibrium models of heterogeneous beliefs that followed the work by Harrison and Kreps, investors are risk-neutra...

► We assess the impact of Spanish labor reforms that restricted the use of temporary workers. ► We study the gap between an input's value of marginal product and its price. ► Our results suggest a positive and significant impact of these reforms on the permanent labor gap. a b s t r a c t a r t i c l e i n f o In the 1990s, Spain approved two labor reforms aimed at reducing the unemployment lev...

This paper derives a Phillips curve with imported commodities as an additional input in the production process. Given greater reliance on exogenously priced imported commodities in production then changes in output lead to a reduced impact on marginal costs and prices. The Phillips curve becomes ‡atter relative to the benchmark New Keynesian case. Empirical evidence supports the hypothesis that...

We show that in a homogeneous-good duopoly market with quality uncertainty and constant unit costs, the Bertrand paradox (i.e., marginal cost pricing) can be avoided.

Previous work on network interconnection has tended to overlook that both the sender and receiver of an electronic message take actions, bear costs, and derive benefits from the message exchange. In a simple model with two-sided benefits and fixed network architectures, we find that the socially optimal interconnection charge is independent of the “direction” of the message and is used to induc...

Firms are generally reluctant to reveal their true marginal costs for environmental abatement. Depending upon the policy instruments used by the regulator, firms may even seek to misrepresent their abatement costs in order to gain a competitive advantage. This paper shows how the regulator can induce truth revealing behavior by firms in the emission permit market. The aggregate optimal emission...