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'Almost' Subsidy-free Spatial Pricing in a Multi-dimensional Setting

Shlomo Weber, Jacques Dreze, Michel Le Breton and Alexei Savvateev

No 9097, Coalition Theory Network Working Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: Consider a population of citizens uniformly spread over the entire plane, that faces a problem of locating public facilities to be used by its members. The cost of every facility is financed by its users, who also face an idiosyncratic private access cost to the facility. We assume that the facilities' cost is independent of location and access costs are linear with respect to the Euclidean distance. We show that an external intervention that covers 0.19% of the facility cost is sufficient to guarantee secession-proofness or no cross-subsidization, where no group of individuals is charged more than its stand alone cost incurred if it had acted on its own. Moreover, we demonstrate that in this case the Rawlsian access pricing is the only secession-proof allocation.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Date: 2007
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Related works:
Journal Article: "Almost" subsidy-free spatial pricing in a multi-dimensional setting (2008) Downloads
Working Paper: “Almost” subsidy-free spatial pricing in a multi-dimensional setting (2007) Downloads
Working Paper: ‘Almost’ subsidy-free spatial pricing in a multi-dimensional setting (2007) Downloads
Working Paper: “Almost” Subsidy-free Spatial Pricing in a Multi-dimensional Setting (2007) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemct:9097

DOI: 10.22004/ag.econ.9097

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