Telephone Subsidy

Preliminary Entry under Subsidy : the Competitive U . S . Local Telephone Industry ∗

The 1996 Telecommunication Act introduces entry into an originally monopolistic U.S. local telephone industry. As competitors cherry pick rich, urban markets to enter, the Act calls for an explicit and procompetitive subsidy policy to narrow the potential divide in telecom infrastructure. To study relevant economic factors in the design of such a policy, we estimate a dynamic oligopoly entry ga...

Child Care Subsidy Programs

Spatial duopoly with cost subsidy

The effects of government subsidies are examined in a spatial duopoly with a conventional and an electronic retailer. The Nash equilibrium is first determined and then the optimal cost subsidy rates are computed that maximize social welfare. The stability of the equilibrium is also investigated and it is shown that in the case of delayed information there is the possibility of cyclic behavior.

Optimal Food Stamp Subsidy Scheme

This paper constructs a simple model to illustrate that the current food stamp subsidy scheme fails to achieve its aim due to the crowding-out effect. In particular, if the household income is sufficiently low, only the corner solution exists and full subsidy is needed. The optimal food stamp subsidy scheme is identified and the subsidy efficiency rate is introduced to measure the impact on foo...

Subsidy Policies and Insurance Demand∗

Using data from a two-year randomized pricing experiment in China, we study the impact and design of subsidy policies for weather insurance. Results show that subsidies are effective in boosting demand in the short-run but not in the longer term. Exploring the channels, we show that while subsidies increase the direct and social effects of payout experiences by enlarging coverage, they also dam...