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The Optimality of Boiteux-Ramsey Pricing

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  • Dierker, Egbert

Abstract

Consider an economy with one public enterprise that is subject to a budgetary constraint and charges prices according to the first-order necessary conditions suggested by M. Boiteux (1956) or F. P. Ramsey (1927). The authors state conditions sufficient to ensure that the resulting allocation is second best. The proof builds on arguments used to demonstrate the Pareto efficiency of marginal cost pricing under appropriate assumptions. Copyright 1991 by The Econometric Society.

Suggested Citation

  • Dierker, Egbert, 1991. "The Optimality of Boiteux-Ramsey Pricing," Econometrica, Econometric Society, vol. 59(1), pages 99-121, January.
  • Handle: RePEc:ecm:emetrp:v:59:y:1991:i:1:p:99-121
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    Cited by:

    1. Zhisong Chen & Keith C.K. Cheung & Manyi Tan, 2019. "Inter-Basin Water Transfer Supply Chain Coordination with Ramsey Pricing," IJERPH, MDPI, vol. 16(19), pages 1-22, September.
    2. Barrie R. Nault & Steffen Zimmermann, 2019. "Balancing Openness and Prioritization in a Two-Tier Internet," Information Systems Research, INFORMS, vol. 30(3), pages 745-763, September.
    3. Dirk Simons, 2011. "Kommentar zum Beitrag von Gunther Friedl," Schmalenbach Journal of Business Research, Springer, vol. 63(63), pages 157-167, January.
    4. David, Laurent & Le Breton, Michel & Merillon, Olivier, 2007. "Kolm as a Contributor to Public Utility Pricing, Second Best Culture and the Theory of Regulation," IDEI Working Papers 490, Institut d'Économie Industrielle (IDEI), Toulouse.
    5. Wan-hsiang Pan, 1995. "A second welfare theorem for constrained efficient allocations in incomplete markets," Journal of Mathematical Economics, Elsevier, vol. 24(6), pages 577-599.
    6. Guesnerie, R., 1995. "The genealogy of modern theoretical public economics: From first best to second best," European Economic Review, Elsevier, vol. 39(3-4), pages 353-381, April.
    7. Yates, Andrew J., 1997. "A sufficiency result for constrained economies," Journal of Mathematical Economics, Elsevier, vol. 27(4), pages 411-423, May.
    8. Ramón J. Torregrosa, 1998. "Financing a Nationalized Monopoly: Coase's Versus Hotelling-Lerner's Solution," Public Finance Review, , vol. 26(4), pages 392-405, July.
    9. Luis C. Corchón & Ramón J. Torregrosa, 2022. "Two extensions of consumer surplus," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(3), pages 557-579, September.

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