Low-Level Versus High-Level Equilibrium in Public Utility Services

Strand, Jon

关键词: AGGREGATE DEMAND;    AGGREGATE SUPPLY;    ALLOCATION;    ASYMMETRIC INFORMATION;    CAPITAL COSTS;   

DOI  :  10.1596/1813-9450-5723
RP-ID  :  WPS5723

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Heterogeneity of public utility servicesis common in developing countries. In a"high-level" equilibrium, the quality of utilityservices is high, consumer willingness to pay for servicesis high, the utility is well funded and staff well paid inorder to induce high quality of performance. In a"low-level" equilibrium the opposite is the case.Which alternative occurs depends on both the quality ofutility management, and public perceptions about servicequality. If a utility administration has the potential tooffer high-quality service, and the public is aware of this,high-quality equilibrium also requires the public s servicepayments to be high enough to fund the needed pay incentivesfor the utility staff. When the public lack knowledge aboutthe utility administration s quality, the public s initialbeliefs about the utility administration s quality also willinfluence their willingness to make adequate servicepayments for a high-quality equilibrium. This paper showsthat, with low confidence, only a low-level equilibrium mayexist; while with higher initial confidence, a high-levelequilibrium become possible. "Intermediate" (inbetween the low- and high-level) outcomes also can occur inearly periods, with "high-level" outcomes later on.