Monopoly Prices versus Ramsey-Boiteux Prices: Are they "similar", and: Does it matter?

Felix Höffler ()
Additional contact information
Felix Höffler: Max Planck Institute for Research on Collective Goods, Bonn, Germany

No 2005_7, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: Ramsey-Boiteux prices and monopoly prices are frequently regarded as being similar. This might suggest that, in particular in network industries with large fixed costs, sometimes monopoly pricing is close to the Ramsey-Boiteux second best and welfare superior to imperfectly regulated prices. This paper tries to specify what is meant by "being similar", and it analyzes the welfare implications that can be drawn from comparing both sets of prices. Interdependence of demand and the impact of competition are discussed. We reinforce the view that monopoly prices are usually not "similar", and even if they are, this implies no positive welfare judgments on monopoly pricing.

Keywords: Ramsey Pricing; Regulation; Access Pricing; Termination (search for similar items in EconPapers)
JEL-codes: L33 L50 L94 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2005-04
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.coll.mpg.de/pdf_dat/2005_07online.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2005_07

Access Statistics for this paper

More papers in Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods Contact information at EDIRC.
Bibliographic data for series maintained by Marc Martin ().