Special interest groups and 4th best transport pricing

Bernhard Wieland

No 1/2006, Discussion Papers from Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics

Abstract: This paper is organized as follows. In order to explain the basic idea of 4th best pricing more fully the following Section 2 will sketch and discuss the above mentioned Laffont model, where it is shown that under certain conditions a uniform tariff may be preferable to an optional tariff because such a uniform tariff is less amenable to the influence of interest groups. Section 3 will illustrate Laffont?s insight with several examples from the transport sector. Section 4 will conclude.

Date: 2006
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