| Summary: | 博士 === 國立中央大學 === 產業經濟研究所 === 90 === The price-cap regulation, proposed by Littlechild (1983), serves to protect consumer from the abuse of monopoly power, facilitate competition, enhance production efficiency, stimulate the firm to pay more R&D efforts, reduce the cost of administrative arrangements and increase the firm’s profit. The proposition that price-gap regulation certainly raises production efficiency is nonetheless too oversimplified since the commitment effect does not work well. The regulated firm tends to bargain with the regulator over price adjustments when its profit is low; on the contrary, the public will ask for a more restrictive regulatory contract when the firm earns too much. As a consequence, it is indifferent between rate-of-return regulation and price-cap regulation for the incentives to firm’s production efficiency.
Since the dynamic efficiency issue leaves much to be desired, we are brought back to the original concern－though with more pricing flexibility between goods and lower costs to regulate, is the allocative efficiency attainable under price-cap regulation? Does the social welfare optimize? Using partial equilibrium analysis, this thesis examines the allocative efficiency and social welfare achieved by a multi-product firm with nonlinear pricing under price adjustment constraints. In the case of neutral and substitution goods，firms under Laspeyres revenue constraint and Paasche revenue constraint will charge the consumer with the highest demand at the marginal price. While in the case that complementary and substitution goods coexist in the economy, all the nonlinear pricing will be above the marginal cost if the own price effect dominates the sum of cross effects and the firm will serve the consumer with the highest demand at the marginal cost. Whatever the relations between the products, consumers with the highest demand will not be served at the marginal cost under separate revenue constraints，which implies the deviation from the allocative efficiency by nonlinear pricing. A further comparison in welfare effect under these cases reveals that the price level under Paasche revenue constraint is the lowest ones whereas that under separate revenue constraint is the highest。If the fixed fee is viewed as the net transfer of wealth between buyers and sellers, the social welfare under Paasche revenue constraint ranks first owing to more units consumed at lower marginal price with that under Laspeyres revenue constraint is second and that under separate revenue constraints is the worst.
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