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Journal of Regulatory Economics

, Volume 6, Issue 3, pp 247–264 | Cite as

Self-selecting tariffs under pure preferences among tariffs

  • Kenneth E. Train
Article

Abstract

The behavioral assumptions for welfare analysis of self-selecting tariffs are generalized to be consistent with those maintained in empirical models of tariff choice. When customers have pure preferences among tariffs, it is shown that the optimal self-selecting tariffs provide strictly greater welfare than mandatory marginal cost prices, contain marginal prices that do not equal marginal cost, and can Pareto dominate an existing tariff. As an illustration of the theoretical results, optimal self-selecting tariffs are calculated empirically for a local telephone company.

Keywords

Theoretical Result Marginal Cost Empirical Model Public Finance Industrial Organization 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Kluwer Academic Publishers 1994

Authors and Affiliations

  • Kenneth E. Train
    • 1
  1. 1.Department of EconomicsUniversity of California at BerkeleyBerkeley

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