CROSS-SUBSIDY ANALYSIS WITH MORE THAN TWO SERVICES

Gerald R. Faulhaber

Journal of Competition Law and Economics, 2005, vol. 1, issue 3, 441-448

Abstract: Thirty years have passed since the publication of “Cross-Subsidization: Pricing in Public Enterprises.” The article rigorously defined cross-subsidization and is now a standard citation of regulators and scholars addressing the pricing of regulated multiproduct firms. The incremental cost test and the stand-alone cost test, however, have often been misunderstood and misapplied. This article answers the most common questions that have arisen in the application of these tests for cross-subsidization and corrects the most common errors that have been committed in their application.

Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:1:y:2005:i:3:p:441-448.

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Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti

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