Note on the relation between quantity and price anomalies under externalities

Eytan Sheshinski*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

Diamond and Mirrlees (1973) provided conditions to ensure that a good generating external economies (diseconomies) should increase (decrease) in aggregate quantity when moving from a competitive equilibrium to any Pareto optimum. We prove that the same conditions ensure that each individual's equilibrium quantity of this good decreases as its price increases.

Original languageEnglish
Pages (from-to)111-115
Number of pages5
JournalEconomics Letters
Volume1
Issue number2
DOIs
StatePublished - 1978

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