Capacity-contingent nonlinear pricing by regulated firms

Daniel F. Spulber*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

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 languageEnglish (US)
Pages (from-to)299-319
Number of pages21
JournalJournal of Regulatory Economics
Volume4
Issue number4
DOIs
StatePublished - Dec 1 1992

ASJC Scopus subject areas

  • Economics and Econometrics

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