Abstract
This chapter is concerned with economic analyses of a congestion-prone public service under competition, as a sequel to the previous chapter for a public service under no competition. The economic analyses of a public service under competition address public policies under decision-making environments that fundamentally differ from those for a public service under no competition. The former should account for the fact that government choices regarding the price and capacity of a public service influence demands for competing public and private services and, therefore, the resource allocation of entire markets. Further, it should reflect the reality that most public services face competition from other public and/or private services that have prices and capacities that cannot be controlled by the government.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
 The proof of (12.26) for thin catchment domain can be worked out in a manner identical to that used to prove (8.33). Further, the implication of (12.26) such that an option with a narrow catchment domain has close substitutes is detailed in Chapter 5; this implication for the case of quantitative, qualitative and mixed competitions is explained in Subsections 5.2.3, 5.4.3, and 5.5.3, respectively.
- 2.
 This property of \( \widehat{\omega } \) is introduced in Subsect. 11.3.1. Note also that one unit of money is equivalent to \( \widehat{\omega } \) units of social welfare index.
- 3.
 The reason for this assertion is presented in the comment for (11.27).
- 4.
 The reason for this assertion is also explained in the comment for (11.28).
References
Baumol WJ, Bradford DF (1970) Optimal departure from marginal cost pricing. Am Econ Rev 60:265–83
Harberger AC (1971) Three basic postulates for applied economics: an interpretive essay. J Econ Lit 9:785–97
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2011 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Moon, DJ. (2011). Policies for Public Services under Competition. In: Congestion-Prone Services Under Quality Competition. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-20189-9_12
Download citation
DOI: https://doi.org/10.1007/978-3-642-20189-9_12
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-20188-2
Online ISBN: 978-3-642-20189-9
eBook Packages: Business and EconomicsEconomics and Finance (R0)