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Existence of Sustainable Prices for Natural Monopoly Outputs

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  • William W. Sharkey

Abstract

This paper discusses optimal pricing for a natural monopoly firm when one or more of its markets are open to entry by rival firms. It is argued that optimal prices must be chosen from the set of sustainable prices. Sufficient conditions for sustainable prices to exist are then discussed. Finally some rules are presented for choosing a particular price vector from the set of sustainable prices.

Suggested Citation

  • William W. Sharkey, 1981. "Existence of Sustainable Prices for Natural Monopoly Outputs," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 144-154, Spring.
  • Handle: RePEc:rje:bellje:v:12:y:1981:i:spring:p:144-154
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    Cited by:

    1. Mark A. Jamison, 2011. "Liberalization and Regulation of Telecoms, Electricity, and Gas in the United States," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 21, Edward Elgar Publishing.
    2. Leonard J. Mirman & Yair Tauman & Israel Zang, 1985. "Supportability, Sustainability, and Subsidy-Free Prices," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 114-126, Spring.
    3. Yuan, Hong & Krishna, Aradhna, 2008. "Pricing of mall services in the presence of sales leakage," Journal of Retailing, Elsevier, vol. 84(1), pages 95-117.
    4. Vincent Iehlé, 2004. "Stable pricing in monopoly and equilibrium-core of cost games," Cahiers de la Maison des Sciences Economiques b05023, Université Panthéon-Sorbonne (Paris 1).

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