EconPapers    
Economics at your fingertips  
 

Optimal dynamic volume-based price regulation

Michele Bisceglia (), Roberto Cellini, Luigi Siciliani and Odd Rune Straume
Additional contact information
Michele Bisceglia: Department of Economics, Management and Quantitative Methods, University of Bergamo;

No 06/2019, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: We consider a model of optimal price regulation in markets where demand is sluggish and asymmetric providers compete on quality. Using a spatial model, which is suitable to investigate the health care and education sector, we investigate within a dynamic set-up the scope for price premiums or penalties on volume. We show that the socially optimal time path of quality provision o¤ the steady state can be replicated by a simple dynamic pricing rule where the dynamic part of the rule is ex-ante non-discriminatory in the sense that the price premium or penalty on volume is common across providers, despite their differing production costs. Whether the price schedule involves a penalty or a premium on volume relates to two concerns regarding production costs and consumer bene ts, which go in opposite directions. Price adjustments over time occur only through the price penalty or premium, not time directly, which highlights the simplicity and thus applicability of this regulation scheme.

Keywords: Price regulation; Quality; Di¤erential games (search for similar items in EconPapers)
JEL-codes: C73 I11 I14 L13 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repositorium.sdum.uminho.pt/bitstream/1822/61392/1/NIPE_WP_6_2019.pdf (application/pdf)

Related works:
Journal Article: Optimal dynamic volume-based price regulation (2020) Downloads
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:nip:nipewp:06/2019

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in NIPE Working Papers from NIPE - Universidade do Minho Núcleo de Investigação em Políticas Económicas e Empresariais, Escola de Economia e Gestão, Universidade do Minho, P-4710-057 Braga, Portugal. Contact information at EDIRC.
Bibliographic data for series maintained by NIPE ().

 
Page updated 2025-04-01
Handle: RePEc:nip:nipewp:06/2019