Nonlinear Pricing Without Market Power: A Second-Best Invisible Hand.

2013 ◽  
Author(s):  
Eduardo Brou
Keyword(s):  
Market Power ◽  
Nonlinear Pricing ◽  
Invisible Hand ◽  
Second Best

scholarly journals Fuel Subsidies Versus Market Power: Is There a Countervailing Second-Best Optimum?

2019 ◽  
Vol 74 (4) ◽  
pp. 1619-1646
Author(s):  
Morakinyo O. Adetutu ◽  
Thomas G. Weyman-Jones
Keyword(s):  
Market Power ◽  
Market Failure ◽  
Climate Change Policy ◽  
Consumer Surplus ◽  
Environmental Cost ◽  
Gasoline Prices ◽  
Second Best ◽  
Change Policy ◽  
Fuel Subsidies ◽  
End Use

Abstract Fuel subsidies distort end-use prices below cost, resulting in overconsumption and huge environmental cost. On the other hand, the mark-up over cost due to the exercise of market power results in the social loss of consumer surplus. We open a new line of inquiry into the potential for a market-based solution from these two countervailing forces: can the two offsetting distortions conceivably achieve a second- best optimum? Relying on dynamic panel techniques and gasoline market data for 68 developing countries, we uncover an excessive second-best subsidy offset to market power mark-up on the order of 4.5. Our results indicate that the potential for policy failure strongly exceeds the potential for market failure in our model, and gasoline prices across our sample may not be aligned with vigorous anti-climate change policy.

Beneficial Moral Hazard and the Theory of the Second Best

2009 ◽  
Vol 46 (2) ◽  
pp. 229-240 ◽  
Author(s):  
Kevin D. Frick ◽  
Michael E. Chernew
Keyword(s):  
Health Insurance ◽  
Moral Hazard ◽  
Medical Care ◽  
Market Power ◽  
Economic Efficiency ◽  
Second Best ◽  
Welfare Consequences

This article examines the welfare consequences of moral hazard, and brings together several arguments suggesting that, in many cases, the additional consumption associated with health insurance could be welfare enhancing. Since conditions for maximum economic efficiency fail to hold in the market for medical care, the theory of the second best is useful. We focus on three efficiency-related reasons why insurance-induced consumption may improve welfare: 1) insurance can offset market power; 2) insurance can remedy some externalities; and 3) insurance can mitigate problems that are associated with misinformation and result in the underutilization of many types of care. These arguments strengthen the case for expanding coverage.

Monopoly

2020 ◽  
pp. 299-324
Author(s):  
David M. Kreps
Keyword(s):  
Market Power ◽  
Demand Function ◽  
Demand Curve ◽  
Aggregate Demand ◽  
Nonlinear Pricing ◽  
Perfect Competition ◽  
Single Vendor ◽  
Monopoly Market ◽  
Substitute Products ◽  
Monopoly Industry

This chapter describes the theory of monopoly. In a monopoly market, there are many buyers and a single vendor of a good. The single vendor is called the monopoly. Buyers are assumed to be price takers, and their demand as a function of price is given, as in the case of perfect competition, by an aggregate demand function. One reason one might find a monopoly industry is because, while other companies can enter this industry, the monopoly acts in a way that forestalls potential competitors. If substitute products are produced and sold, they restrain the monopoly's market power by flattening and shifting-in the monopoly's demand curve. The idea of substitutes for a monopoly product comes up in another context — that of multigood monopolies. The chapter then looks at nonlinear pricing.

Working With Interpreters to Support Students Who Are English Language Learners

2016 ◽  
Vol 1 (16) ◽  
pp. 15-27 ◽  
Author(s):  
Henriette W. Langdon ◽  
Terry Irvine Saenz
Keyword(s):  
United States ◽  
English Language Learners ◽  
Language Learners ◽  
English Language ◽  
First Language ◽  
The United States ◽  
The Other ◽  
Primary Language ◽  
Second Best ◽  
Support Students

The number of English Language Learners (ELL) is increasing in all regions of the United States. Although the majority (71%) speak Spanish as their first language, the other 29% may speak one of as many as 100 or more different languages. In spite of an increasing number of speech-language pathologists (SLPs) who can provide bilingual services, the likelihood of a match between a given student's primary language and an SLP's is rather minimal. The second best option is to work with a trained language interpreter in the student's language. However, very frequently, this interpreter may be bilingual but not trained to do the job.

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