Template-Type: ReDIF-Paper 1.0
Author-Name: Nikolaos Danias
Author-Name-First: Nikolaos
Author-Name-Last: Danias
Author-Email: nikolaos.danias@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: J Kim Swales
Author-Name-First: J Kim
Author-Name-Last: Swales
Author-Email: j.k.swales@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Title: The welfare impacts of discriminatory price tariffs
Abstract: This paper looks at the use of asymmetric tariffs as a regulatory instrument. We use a monopolistic market setup with two markets and we introduce price controls in one of the two. The purpose of the regulator is to maximise consumer welfare through this price discriminatory practice. We consider cases where the welfare of the consumers in the two markets is weighted equally and cases where it is not. In some cases we allow for the two markets to be linked through a monopsonistic input market. The paper focuses on the welfare implications of this regulatory approach, with the firm operating under a profit restriction. Results suggest that having only one price-controlled market is in certain cases a good option from a welfare perspective.
Length: 33 pages
Creation-Date: 2016-06
Revision-Date: 
Publication-Status: Published
File-URL: http://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/16-09.pdf
File-Format: Application/pdf
Number: 1609
Classification-JEL: monopoly, asymmetric regulation, tariffs, welfare
Keywords: D42,D61, I31, I38, L12, L51
Handle: RePEc:str:wpaper:1609