The Ramsey Problem for Congestible Facilities
In recent years, a new set of models drawing on Vickrey  has been developed to analyze the economics of congestible facilities. These models are structural in that they derive the cost function from consumers' time-of-use decisions and the congestion technology. Standard models, in contrast, simply assume the general form of the cost function. We apply the new approach to analyze the Ramsey problem for a congestible facility, and show that the solution generally entails cost inefficiency. Standard models have failed to reveal this result because they treat the cost function as completely determined by technology.
|Date of creation:||May 1994|
|Date of revision:|
|Publication status:||published as Journal of Public Economics, Vol. 50 (1993) pp. 371-396|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mohring, Herbert, 1970. "The Peak Load Problem with Increasing Returns and Pricing Constraints," American Economic Review, American Economic Association, vol. 60(4), pages 693-705, September.
- Guesnerie Roger & Roberts Kevin, 1980.
"Effective policy tools and quantity controls,"
CEPREMAP Working Papers (Couverture Orange)
- Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, vol. 72(3), pages 467-79, June.
- Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
- Sam Bucovetsky, 1984. "On the Use of Distributional Waits," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 699-717, November.
- Bruce C. Greenwald & Joseph E. Stiglitz, 1986. "Externalities in Economies with Imperfect Information and Incomplete Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 229-264.
- Richard Arnott, 1986. "Information and Time-Of-Use Decisions in Stochastically Congestable Facilities," Discussion Papers 788, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Smith, M. J., 1983. "The existence and calculation of traffic equilibria," Transportation Research Part B: Methodological, Elsevier, vol. 17(4), pages 291-303, August.
- Alan J. Auerbach, 1982.
"The Theory of Excess Burden and Optimal Taxation,"
NBER Working Papers
1025, National Bureau of Economic Research, Inc.
- Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-83, June.
- Braid, Ralph M., 1989. "Uniform versus peak-load pricing of a bottleneck with elastic demand," Journal of Urban Economics, Elsevier, vol. 26(3), pages 320-327, November.
- Guesnerie, R., 1980.
"Second-best pricing rules in the Boiteux tradition : Derivation, review and discussion,"
Journal of Public Economics,
Elsevier, vol. 13(1), pages 51-80, February.
- Guesnerie Roger, 1979. "Second best pricing rules in the boiteux tradition : derivation, review and discussion," CEPREMAP Working Papers (Couverture Orange) 7920, CEPREMAP.
- Richard Arnott & Andre de Palma & Robin Lindsey, 1987. "Bottleneck Congestion with Elastic Demand," Working Papers 690, Queen's University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberte:0084. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.