Capacity-Contingent Nonlinear Pricing by Regulated Firms
AbstractSecond-best Pareto optimal pricing by a regulated firm subject to demand and capacity shocks is examined. Nonlinear price schedules for the firm's customers are obtained that are contingent on capacity realizations. The second-best Pareto optimal mechanism also is implemented by an allocation mechanism based on the consumer's choice of a minimum demand or firm power level. The optimal mechanism is implemented as well by a general form of priority pricing. Copyright 1992 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Journal of Regulatory Economics.
Volume (Year): 4 (1992)
Issue (Month): 4 (December)
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Web page: http://www.springerlink.com/link.asp?id=100298
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