Nonlinear Pricing and the Utility Possibility Set
We consider nonlinear pricing policies that are designed by a social welfare maximizer who operates under a non-negative profit requirement. In our two-type economy, we characterize the set of all feasible nonlinear pricing policies and the frontier of the utility possibility set. Our results provide a link between distortion in consumption and individual, as well as, social welfare.
|Date of creation:||04 Mar 2005|
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