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| Author: | Mandy, D. M. |
| Title: | Competitive two-part tariffs as a response to differential rates of time preference |
| Journal: | Economica
1991 : AUG, VOL. 58:231, p. 377-389 |
| Index terms: | PRICING WELFARE MARKETS PRICES TARIFFS |
| Language: | eng |
| Abstract: | Until recently, the literature on non-linear pricing has been concerned almost exclusively with demonstrating how a monopolist or regulator can improve welfare by using a non-linear payment schedule. The welfare improvement occurs because, with declining average cost, marginal cost pricing is inconsistent with non-negative profit unless a non-linear price schedule is used. However, non-linear prices arise in many different markets. This paper explores non-linear price equilibria in which both multiple firms and price schedules exist. These outcomes are driven by the use of a sustainability criterion for equilibrium and differential rates of discount as the motivating force for the formation of non-linear prices. |
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