Date of this Version


Document Type

Working Paper

Publication Details

Neil A. Campbell and Jeffrey J. Kline (2001) Do profit maximizers take cold showers?

School of Business Working Paper ; No. 1, Mar. 2001

© Copyright Neil A. Campbell, Jeffrey J. Kline and the School of Business, Bond University


A firm takes a "cold shower" if removal of a protective subsidy induces investment in a cost-reducing technology. We show that if the investment lowers marginal cost everywhere, then profit maximizers never take cold showers. However, if the investment does not lower marginal cost everywhere, a profit maximizer may take a cold shower.



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