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Supportability, Sustainability, and Subsidy-Free Prices

  • Leonard J. Mirman
  • Yair Tauman
  • Israel Zang

This article studies the relationships among the concepts of subsidy-free prices, anonymously equitable prices, supportability, and sustainability. In particular, we set out conditions under which these concepts are not vacuous. Several new sets of conditions under which a subsidy-free price vector is sustainable are also presented. For general, nonseparable demands, we establish the existence of an Aumann-Shapley price vector that is anonymously equitable and sustainable.

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Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 16 (1985)
Issue (Month): 1 (Spring)
Pages: 114-126

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Handle: RePEc:rje:randje:v:16:y:1985:i:spring:p:114-126
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  1. Sharkey, William W. & Telser, Lester G., 1978. "Supportable cost functions for the multiproduct firm," Journal of Economic Theory, Elsevier, vol. 18(1), pages 23-37, June.
  2. Faulhaber, Gerald R & Levinson, Stephen B, 1981. "Subsidy-Free Prices and Anonymous Equity [Cross-Subsidization: Pricing in Public Enterprises]," American Economic Review, American Economic Association, vol. 71(5), pages 1083-91, December.
  3. Leonard J. Mirman & Yair Tauman & Israel Zang, 1983. "Ramsey Prices, Average Cost Prices and Price Sustainability," Discussion Papers 561, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Faulhaber, Gerald R, 1975. "Cross-Subsidization: Pricing in Public Enterprises," American Economic Review, American Economic Association, vol. 65(5), pages 966-77, December.
  5. ten Raa, Thijs, 1983. "Supportability and anonymous equity," Journal of Economic Theory, Elsevier, vol. 31(1), pages 176-181, October.
  6. 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.
  7. Baumol, William J & Bailey, Elizabeth E & Willig, Robert D, 1977. "Weak Invisible Hand Theorems on the Sustainability of Multiproduct Natural Monopoly," American Economic Review, American Economic Association, vol. 67(3), pages 350-65, June.
  8. John C. Panzar & Robert D. Willig, 1977. "Free Entry and the Sustainability of Natural Monopoly," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 1-22, Spring.
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