Econometrica Vol. 45 No. 2 1977
External Diseconomies in Consumption and Monopoly Pricing: A Comment
Abstract
IN THEIR INTERESTING PAPER, External Diseconomies in Consumption and Monopoly Pricing [3], I. Luski and R. Lusky (LL) have presented a result concerning the respective value of the monopoly price and the socially optimal price of a private good, the consumption of which inflicts external diseconomies. But their presentation is incomplete because they consider a model with only one good freely available, forget to take into account the distribution of income, and limit the proof of the main theorem to a special case. These deficiencies make appreciation of the validity of the result difficult. We shall discuss here the same problem in the framework of the simplest consistent model.
- DOI
- 10.2307/1911226
- Volume
- 45
- Issue
- 2
- Pages
- 519
- Sources
- bibtex:phds-export.bib openalex crossref