AbstractWe study the efficiency property of responsive pricing - a scheme first proposed by Vickrey - that increases prices as a function of capacity utilization. We show that although responsive pricing implements allocations that are arbitrarily close to market clearing, these allocations are not always efficient. We identify conditions under which efficiency occurs and discuss implications for the use of responsive pricing.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 34 (2008)
Issue (Month): 2 (February)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- D60 - Microeconomics - - Welfare Economics - - - General
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
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