Many factors influence the extent to which persons who are eligible for public (or private) aid program actually receive the aid. In predicting the degree of utilization of any particular aid program, a potentially important variable is the marginal stigma cost, the added stigma incurred by a person who accepts the benefits from an incremental aid program for which he is eligible. Empirical exa...

We analyse the properties of optimal price adjustment to hospitals when no lump-sum transfers are allowed and when prices differ to reflect observable exogenous differences in costs. We find that: (a) when the marginal benefit from treatment is decreasing and the cost function is the power function, price adjustment for hospitals with higher costs is positive but partial; if the marginal benefi...

We show that there is a unique correlated equilibrium, identical to the unique Nash equilibrium, in the classic Bertrand oligopoly model with homogenous goods and identical marginal costs. This provides a theoretical underpinning for the socalled “Bertrand paradox” as well as its most general formulation to date. Our proof generalizes to asymmetric marginal costs and arbitrarily many players in...

The health cost of on-road air pollution exposure is a component of traffic marginal costs that has not previously been assessed. The main objective of this paper is to introduce onroad pollution exposure as an externality of traffic, particularly important during traffic congestion when on-road pollution exposure is highest. Marginal private and external cost equations are developed that inclu...

This paper quantifies the degree of market power in the German wholesale electricity market. A fundamental model is used to derive competitive marginal cost estimators which are compared with observed electricity prices. Marginal costs are calculated focusing on market fundamentals such as plant capacities, fuel prices, and load structures. In addition, international power exchange and dynamic ...