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A Robust Methodology for Ramsey Pricing with an Application to UK Postal Services

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Author Info
Cuthbertson, Keith
Dobbs, Ian M

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Abstract

The policy relevance of Ramsey pricing calculations naturally turns on their robustness. This paper sets out a methodology for a 'minimal information' approach in examining the sensitivity of Ramsey prices to changes in demand and cost parameters. The 'minimal information' required for the approach to be operational is (1) a set of estimated demand functions for the products involved and (2) some idea of the 'ball-park' for marginal costs for these products. A case study of the U.K. letters business is used to illustrate the approach. Copyright 1996 by Blackwell Publishing Ltd.

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Industrial Economics.

Volume (Year): 44 (1996)
Issue (Month): 3 (September)
Pages: 229-47
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Handle: RePEc:bla:jindec:v:44:y:1996:i:3:p:229-47

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  1. Joan Calzada & Francesc Trillas, 2005. "The interconnection prices in telecomunications: from theory to practice," Hacienda Pública Española, IEF, vol. 173(2), pages 85-125, June. [Downloadable!]
  2. Thijs ten Raa, 2009. "Monopoly, Pareto and Ramsey Mark-ups," Journal of Industry, Competition and Trade, Springer, vol. 9(1), pages 57-63, March. [Downloadable!] (restricted)
  3. Babu Nahata & Alexei Izyumov & Vladimir Busygin & Anna Mishura, 2003. "An application of Ramsey model in transition economy: a Russian case study," General Economics and Teaching 0307003, EconWPA. [Downloadable!]
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