THE LONG-RUN EFFICIENCY OF BLOCK-RATE PRICING

It is widely believed that block-rate pricing separates income redistribution from efficiency consideration. We show that social optimum can not be implementable by block-rate pricing. Particularly, block-rate pricing with marginal cost as the highest block induces over production and utilization of resources, too-small firm size, and welfare losses.


Issue Date:
1998
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/20948
Total Pages:
16
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-24

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