Abstract
Starting from an industry where production is provided by a public monopolist, we observe the effects of a sequence of reforms within the network industry on consumer surplus. Using a simple comparative statics framework, we find the indifference conditions for the consumer surplus under the following regimes: a public monopoly, an unregulated private monopoly, a regulated private monopoly, a vertically disintegrated monopoly, a duopoly and a liberalized market. The results are determined by the relative size of the x-inefficiencies of the public monopolist, allocative inefficiencies of the private monopoly, the cost of unbundling and the costs related to establishing a competitive market.
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Ceriani, L., Florio, M. Consumer surplus and the reform of network industries: a primer. J Econ 102, 111–122 (2011). https://doi.org/10.1007/s00712-010-0172-x
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DOI: https://doi.org/10.1007/s00712-010-0172-x