The authors explore the interactions among firms with increasing returns regulated to break even by pricing with two-part tariffs. They provide conditions for existence and for efficiency of general equilibria with n firms. This involves finding hookup fees that are voluntarily paid and cover the firms' losses from marginal cost pricing--a problem that because of both substitution and income effects is complicated by multiple firms using two-part tariffs, but that must be solved to ensure the continuity of demands necessary to prove break-even equilibria exist. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 34 (1993) Issue (Month): 4 (November) Pages: 903-22 Download reference. The following formats are available: HTML
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