Abstract
Second-best Pareto optimal pricing by a regulated firm subject to demand and capacity shocks is examined. Nonlinear price schedules for the firm's customers are obtained that are contingent on capacity realizations. The second-best Pareto optimal mechanism also is implemented by an allocation mechanism based on the consumer's choice of a minimum demand or firm power level. The optimal mechanism is implemented as well by a general form of priority pricing.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 299-319 |
| Number of pages | 21 |
| Journal | Journal of Regulatory Economics |
| Volume | 4 |
| Issue number | 4 |
| DOIs | |
| State | Published - Dec 1992 |
ASJC Scopus subject areas
- Economics and Econometrics