Journal Article The Isolation Paradox and the Discount Rate for Benefit-Cost Analysis: A Comment Get access David M. Newbery David M. Newbery University of California, Berkeley Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 105, Issue 1, February 1990, Pages 235–238, https://doi.org/10.2307/2937827 Published: 01 February 1990

Most of the British electricity supply industry has been privatized. Two dominant generators supply bulk electricity to an unregulated "pool." They submit a supply schedule of prices for generation and receive the market-clearing price, which varies with demand. Despite claims that this should be highly competitive, we show that the Nash equilibrium in supply schedules implies a high markup on marginal cost and substantial deadweight losses. Further simulations, to show the effect of entry by 1994, produce somewhat lower prices, at the cost of excessive entry; subdividing the generators into five firms would produce better results.

Vehicles damage roads and, thus, increase road repair costs and create a road damage externality by raising the operating costs of subsequent vehicles. The main result is that if periodic road maintenance is condition responsive and if all road damage is attributable to traffic, then, in steady state with zero traffic growth, the average road damage externality is zero a nd the appropriate road damage charge is the average maintenance cost. Where weather accounts for some road damage, the road damage externality is no longer identically zero, but is quantitatively negligible. Road charges now recover a fraction of road costs. Copyright 1988 by The Econometric Society.

Most studies of commodity price stabilization assume that all agents behave competitively. However, many commodities suitable for stockpiling are produced by countries with a significant share of the world market, and commodity agreements themselves often result in cartelization of the market. The paper explores the consequences of market power for the choice of storage rule and the degree of price stabilization. It finds that with linear demand, dominant producers choose more stable prices than under perfect competition and price stability increases with their market share. With constant elastic demand the competitive degree of price stabilization is achieved.

Journal Article Risk Sharing, Sharecropping and Uncertain Labour Markets Get access David M. G. Newbery David M. G. Newbery Churchill College, Cambridge, and Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 3, October 1977, Pages 585–594, https://doi.org/10.2307/2296910 Published: 01 October 1977 Article history Received: 01 May 1974 Accepted: 01 December 1976 Published: 01 October 1977

This paper shows that, in the absence of a complete set of risk markets, prices provide incorrect signals for guiding production decisions. Even if all individuals have rational expectations concerning the distribution of prices which will prevail on the market next period, the market allocation is, in general, not a constrained Pareto optimum. Essentially the only conditions under which, for all technologies, the market equilibrium is a constrained Pareto optimum are those in which risk markets are redundant. We derive the necessary and sufficient conditions for redundancy of risk markets, which turn out to be extremely restrictive.

Most of the British electricity supply industry has been privatized. Two dominant generators supply bulk electricity to an unregulated "pool." They submit a supply schedule of prices for generation and receive the market-clearing price, which varies with demand. Despite claims that this should be highly competitive, the authors show that the Nash equilibrium in supply schedules implies a high markup on marginal cost and substantial deadweight losses. Further simulations, to show the effect of entry by 1994, produce somewhat lower prices at the cost of excessive entry; subdividing the generators into five firms would produce better results. Copyright 1992 by University of Chicago Press.