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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol, Emmanuelle / Brunner, Johann / Fleck, Robert / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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Volume 18, Issue 2

Issues

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

Public–Private Monopoly

Marian W. Moszoro
  • Corresponding author
  • George Mason University and Warsaw School of Economics, Interdisciplinary Center for Economic Science, 3434 Washington Blvd Arlington, VA 22201, United States of America
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Published Online: 2018-02-01 | DOI: https://doi.org/10.1515/bejeap-2016-0314

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.

Keywords: natural monopolies; operating efficiency; public–private partnerships; organization structure; regulation

JEL Classification: L22; L32; L43; L51

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About the article

Published Online: 2018-02-01


Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 18, Issue 2, 20160314, ISSN (Online) 1935-1682, DOI: https://doi.org/10.1515/bejeap-2016-0314.

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