Economic Effects of Non-Binding Price Constraints
研究了非约束性价格下限或上限如何影响竞争性企业的短期和长期行为，发现即使价格限制低于当前市场价格，也会改变企业决策和市场均衡。
FOR decades, the conventional wisdom among economists has been that a price floor or price ceiling has no effect whatsoever on the market equilibrium and quantity.1 This hypothesis rests on the shaky theoretical assumption that the competitive firm's perception of future market conditions is not altered when the government imposes a price control. Recent experiments by Isaac and Plott [6] and Smith and Williams [18] cast doubt on this conventional wisdom, but they offer no theory to explain their findings. Similarly Working [19], Benedict [1], and Johnson [8] alluded that price supports set below the market equilibrium price would distort the supply response offarmers without explaining why. Only Lee [10] and Eeckhoudt and Hansen [4] have developed theories to explain why firms react this way. Lee used an intertemporal decision-making model to show that a price ceiling implemented above the current price would affect both price and output in the current period. However, Lee discussed only those cases where resources have a finite inventory (non-renewable resources), which once depleted cannot be produced again. Following Sandmo [15], Ishii [7], and Coes [3], Eeckhoudt and Hansen analyzed the restraining effects of minimum and maximum prices on a competitive firm. Using a static equilibrium model, they explained the short run response of a utility maximizing firm to the imposition of price constraints. However, Eeckhoudt and Hansen were unable to sign the effect that a price ceiling has on the volume of industrial output. Furthermore, they ignored all long run adjustments. Our model differs from the previous studies in that we assume firms maximize the market value of the firm. In so doing, we are able to determine both the short run and the long run effects that currently non-binding price restrictions have on a competitive industry. Consider the conventional competitive market in which the long run equilibrium is achieved when all the firms in the industry have an expected net worth comparable to their next best alternative. For simplicity, assume a price floor, Pf, is inacted that is lower than the current market price and will remain constant for the forseeable future. Furthermore, assume the government agrees