Nonlinear Pricing under a Balanced-Budget Requirement: The Two-Type Case

Tommy Andersson

No 2004:21, Working Papers from Lund University, Department of Economics

Abstract: An economy consisting of two different types of consumers and one publicly owned natural monopoly is under consideration. The preferences of the consumers are assumed to be linear in money and the demand curves are assumed not to cross. We also suppose that the net utility from consumption is so high that we do not have to consider the individual rationality constraints. Given these assumptions, we completely characterize the set of budget-balanced and Pareto efficient nonlinear pricing schedules. This complete characterization has not been presented in the literature before.

Keywords: Nonlinear Pricing; Budget-Balance (search for similar items in EconPapers)
JEL-codes: D63 D82 H40 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2004-10-08
New Economics Papers: this item is included in nep-ind and nep-mic
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