A comment on Bradburd: "Privatisation of natural monopolies"

Johan Willner*

*Korresponderande författare för detta arbete

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17 Citeringar (Scopus)

Sammanfattning

In a recent issue of this journal, Ralph Bradburd (1995) argues that the efficiency gains of privatising a natural monopoly are likely to outweigh any loss of allocative efficiency. However, a trade-off based on a definition of the total surplus which includes profits but not internal rents is flawed. Correcting the analysis shows that even stronger conditions have to be met before privatising a natural monopoly is beneficial. The same is true if demand schedules are iso-elastic rather than linear. Recent evidence on demand elasticity and efficiency differences suggests that privatisation would be likely to reduce welfare even according to Bradburd's approach.

OriginalspråkEngelska
Sidor (från-till)869-882
Antal sidor14
TidskriftReview of Industrial Organization
Volym11
Utgåva6
DOI
StatusPublicerad - 1996
MoE-publikationstypA2 Granska artikel i en vetenskaplig tidskrift

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