THE LONG-RUN EFFICIENCY OF BLOCK-RATE PRICING

Ziv Bar-Shira () and Israel Finkelshtain ()

No 20948, 1998 Annual meeting, August 2-5, Salt Lake City, UT from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: It is widely believed that block-rate pricing separates income redistribution from efficiency consideration. We show that social optimum can not be implementable by block-rate pricing. Particularly, block-rate pricing with marginal cost as the highest block induces over production and utilization of resources, too-small firm size, and welfare losses.

Keywords: Demand and Price Analysis; Industrial Organization; Institutional and Behavioral Economics (search for similar items in EconPapers)
Pages: 16
Date: 1998
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea98:20948

DOI: 10.22004/ag.econ.20948

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