How hard is it to maximize profit? Evidence from a 19th-century Italian state monopoly.
In this paper, we study the ability of the 19th-century Italian government to choose profit maximizing prices for a multiproduct monopolist. We use very detailed historical data on the tobacco consumption in 62 Italian provinces from 1871 to 1888 to estimate a differentiated product demand system. T...
| Publicado en: | Oxford Economic Papers Vol. 73; no. 2; pp. 879 - 903 |
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| Autores principales: | , , |
| Formato: | Artículo |
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Oxford University Press / USA
Apr2021
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=149925248&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 149925248 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00307653 OXE jtl: Oxford Economic Papers issn: 00307653 maglogo: N pubinfo: dt: Apr2021 vid: 73 iid: 2 pid: 622 pub: Oxford University Press / USA artinfo: ui: 149925248 10.1093/oep/gpz076 ppf: 879 ppct: 24 formats: tig: atl: How hard is it to maximize profit? Evidence from a 19th-century Italian state monopoly. aug: au: Ciccarelli, Carlo Fraja, Gianni De Tiezzi, Silvia affil: Department of Economics and Finance, University of Rome Tor Vergata , Via Columbia 2, Rome, I-00133, Italy Nottingham School of Economics, Sir Clive Granger Building, University Park , Nottingham, NG7 2RD, UK; University of Rome Tor Vergata, Department of Economics and Finance, Via Columbia 2, I-00133, Rome, Italy; and C.E.P.R, 90-98 Goswell Street, London, EC1V 7DB, UK University of Siena, Department of Economics and Statistics , Piazza San Francesco 7, Siena, I-53100, Italy su: Monopolies Profit maximization Demand function Price marks Government revenue Price discrimination sug: subj: Monopolies Profit maximization Demand function Price marks Government revenue Price discrimination ab: In this paper, we study the ability of the 19th-century Italian government to choose profit maximizing prices for a multiproduct monopolist. We use very detailed historical data on the tobacco consumption in 62 Italian provinces from 1871 to 1888 to estimate a differentiated product demand system. The demand conditions and the legal environment of the period made this market as close to a textbook monopoly as is practically possible. The government's stated aim for this industry was profit maximization: since at the time profits from tobacco were close to 10% of the revenues for the cash-strapped government, the stated aim was very likely the true one. Our empirical application uses historical price and cost data, and suggests that the government was not wide off the mark: the tobacco prices were 'not far' from those dictated by the multiproduct monopoly formulae for profit maximization with interdependent demand functions. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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