The Price System vs. Rationing: An Extension
AbstractElaborating on the analysis of Weitzman, this note examines how the comparative effectiveness of the price system vs. rationing is affected when planners face a cubic loss function. It is shown that the comparative advantage of the price system over rationing will depend on the skewness of income distribution as well as on the aversion of the planners towards underfulfillment of the consumers' allocation plan.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 12 (1981)
Issue (Month): 1 (Spring)
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Web page: http://www.rje.org
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