Public sector rationing and private sector selection [paper accepted and forthcoming in Journal of Public Economic Theory]

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Etat: Serval
Version: de l'auteur
ID Serval
serval:BIB_24E39B5D163F
Type
Rapport: document publié par une institution, habituellement élément d'une série.
Sous-type
Working paper: document de travail dans lequel l'auteur présente les résultats de ses travaux de recherche. Les working papers ont pour but de stimuler les discussions scientifiques avec les milieux intéressés et servent de base pour la publication d'articles dans des revues spécialisées.
Collection
Publications
Titre
Public sector rationing and private sector selection [paper accepted and forthcoming in Journal of Public Economic Theory]
Auteur(s)
Grassi Simona, Ma Ching-to Albert
Institution
Boston University- Department of Economics
Date de publication
06/2010
Numéro
2009-a
Genre
Working paper
Langue
anglais
Nombre de pages
39
Résumé
We study the interaction between nonprice public rationing and prices in the private market. Under a limited budget, the public supplier uses a rationing policy. A private firm may supply the good to those consumers who are rationed by the public system. Consumers have different amounts of wealth, and costs of providing the good to them vary. We consider two regimes. First, the public supplier observes consumers' wealth information; second, the public supplier observes both wealth and cost information. The public supplier chooses a rationing policy, and, simultaneously, the private firm, observing only cost but not wealth information, chooses a pricing policy. In the first regime, there is a continuum of equilibria. The Pareto dominant equilibrium is a means-test equilibrium: poor consumers are supplied while rich consumers are rationed. Prices in the private market increase with the budget. In the second regime, there is a unique equilibrium. This exhibits a cost-effectiveness rationing rule; consumers are supplied if and only if their costbenefit ratios are low. Prices in the private market do not change with the budget. Equilibrium consumer utility is higher in the cost-effectiveness equilibrium than the means-test equilibrium [Authors]
Création de la notice
18/10/2010 17:04
Dernière modification de la notice
03/03/2018 15:00
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