Competitive Pricing

Antonio Villar

No 07.08, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: Competitive pricing is a pricing rule that combines two principles that are present in competitive markets. The profit principle (an action will be chosen only if it yields maximal payoffs), and the scarcity principle (markets make expensive those commodities that restrict production possibilities). It is shown that, under standard assumptions, these principles imply profit maximization at given prices. But also that they can be applied to economies with non-convex production sets (e.g. firms with S-shaped production functions). The chief properties of this pricing rule, as well as the existence and efficiency of the associated equilibria, are analyzed

Keywords: non-convex production sets; competitive pricing rule; competitive pricing equilibrium. (search for similar items in EconPapers)
JEL-codes: D50 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2007-05
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:07.08

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