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A Note on Non-Discriminatory Access to Railroad Infrastructure

  • Russell Pittman

    (U.S. Department of Justice Antitrust Division)

The setting of user prices for enterprises with large fixed costs and marginal costs below average costs – “natural monopolies” – raises important policy questions regarding both efficiency and equity. It has become well accepted among economists that, in a variety of settings, welfare may be improved if such prices are set using systems that are non-linear or discriminatory – for example, two-part tariffs and Ramsey pricing. If these pricing schemes are ruled out, the principal alternatives are large government subsidies and the inefficiencies of fully allocated cost pricing. Why should the setting of access prices be any different?

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Paper provided by EconWPA in its series Industrial Organization with number 0303004.

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Length: 20 pages
Date of creation: 17 Mar 2003
Date of revision:
Handle: RePEc:wpa:wuwpio:0303004
Note: Type of Document - ; prepared on PC; pages: 20 ; figures: 2 Figures included
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Philippe Gagnepain & Marc Ivaldi, 2002. "Incentive Regulatory Policies: The Case of Public Transit Systems in France," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 605-629, Winter.
  2. Estache, A. & Goldstein, A. & Pittman, R., 2000. "Privatization and Regulatory Reform in Brazil: The Case of Freight Railways," Papers 00-5, U.S. Department of Justice - Antitrust Division.
  3. Friedlaender, Ann F & Spady, Richard H, 1980. "A Derived Demand Function for Freight Transportation," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 432-41, August.
  4. Leroy P. Jones & Pankaj Tandon & Ingo Vogelsang, 1990. "Selling Public Enterprises: A Cost/Benefit Methodology," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262600625, June.
  5. Jack High (ed.), 2001. "Competition," Books, Edward Elgar, number 1751, March.
  6. 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.
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