Technical Report Does the Mixed Policy Always Have the Superiority?

Mori, Daiken

This paper seeks to examine the superiority of the mixed policy and uniform regulation on two distortions -markets power and negative externality- in the market and uncertainty. Contrary to Mandell’s (2008) conclusion, we show that the mixed policy can be dominated when the price elasticity of demand is high. We also demonstrate that having pricing power by firms causes distortions in the market and the chosen domain of dominant mixed policy in imperfectly competitive markets shrinks compared to perfectly competitive markets.

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