COMPARATIVE STATICS OF A MONOPOLISTIC FIRM FACING RATE-OF-RETURN AND COMMAND-AND-CONTROL POLLUTION CONSTRAINTS

    Authors

    M. R. Caputo;D. Popov

    Comments

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    Abbreviated Journal Title

    Bull Econ. Res.

    Keywords

    Averch-Johnson; command-and-control regulations; comparative statics; Economics

    Abstract

    The intrinsic comparative statics properties of a general rate-of-return regulated, profit-maximizing model of a monopolist facing a command-and-control pollution constraint are derived. Recent advances in the theory of comparative statics are used to derive the basic comparative statics of the model, which are contained in an observable negative semi-definite matrix and possess the form of Slutsky-like expressions. We consider several command-and-control pollution constraints that are commonly implemented in practice, and conclude that the intrinsic comparative statics properties of the model are qualitatively invariant to the type of command-and-control pollution constraint imposed. We compare our results with those extant, and find that several basic results from the standard A-J model no longer hold in our model.

    Journal Title

    Bulletin of Economic Research

    Volume

    66

    Publication Date

    1-1-2014

    Document Type

    Article

    Language

    English

    First Page

    S17

    Last Page

    S35

    WOS Identifier

    WOS:000348550700002

    ISSN

    0307-3378

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