The Market Provision of Club Goods in the Presence of Scale Economies
Bibliographic Data
| ID | 9727377 |
|---|---|
| Authors | Peter W Kennedy (corresponding author) |
| Year | 1990 |
| Volume | 57 |
| Issue | 228 |
| Pages | 515 |
| Publication date | 1990-11-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | JSTOR (PUBLISHER) |
| DOI | 10.2307/2554716 |
| OpenAlex | W1986981147 |
| Language | EN |
| References cited | 3 |
A natural club monopoly exists when economies of scale are so significant relative to population size that, in the efficient allocation, the entire population is included in a single club. Under these circumstances, an uncontested monopolist will inefficiently exclude some individuals from the club if marginal congestion costs are sufficiently high when the entire population is included. If admitting that the entire population is profit-maximizing, then the facility size chosen is also efficient. A perfectly contestable monopoly is always efficient. "External" economies of scale exist when the cost of each facility declines as more facilities are provided. This externality leads a competitive market to provide too few clubs, but a monopolist will provide an efficient allocation because it internalizes the cost externality. Copyright 1990 by The London School of Economics and Political Science
Business · Club · Commerce · Economics · Economies of scale · Geography · Market economy · Microeconomics · Scale (ratio) · Economic theories and models · Fiscal Policy and Economic Growth · Local Government Finance and Decentralization
| Citation velocity | historical |
|---|---|
| Highly cited | No |