Monopoly and Soft Budget Constraint
仁慈的政府可能补贴不盈利的垄断企业，但企业会故意减少投资来骗取补贴，导致福利损失远超垄断定价的无谓损失；价格上限反而会软化预算约束、降低福利，而竞争能硬化预算约束。
A benevolent government may decide to subsidize an unprofitable monopoly whose profits do not capture all the social surplus from its production. Anticipating this, the firm may underinvest in order to become unprofitable and extract state subsidies. The resulting welfare loss may exceed by many times the deadweight cost of monopoly pricing. Committing the firm to a price ceiling may soften its budget constraint and thus reduce welfare. Competition can harden budget constraints in industries in which free entry is socially excessive.