Journal of Regulatory Economics

, Volume 4, Issue 4, pp 299–319

Capacity-contingent nonlinear pricing by regulated firms

Authors

  • Daniel F. Spulber
    • Northwestern University J.L. Kellogg Graduate School of Management, Leverone Hall
Article

DOI: 10.1007/BF00134924

Cite this article as:
Spulber, D.F. J Regul Econ (1992) 4: 299. doi:10.1007/BF00134924

Abstract

Second-best Pareto optimal pricing by a regulated firm subject to demand and capacity shocks is examined. Nonlinear price schedules for the firm's customers are obtained that are contingent on capacity realizations. The second-best Pareto optimal mechanism also is implemented by an allocation mechanism based on the consumer's choice of a minimum demand or firm power level. The optimal mechanism is implemented as well by a general form of priority pricing.

Copyright information

© Kluwer Academic Publishers 1992