IDEAS home Printed from https://ideas.repec.org/a/rje/randje/v18y1987iwinterp550-563.html
   My bibliography  Save this article

Optimality and Sustainability: Regulation and Intermodal Competition in Telecommunications

Author

Listed:
  • Michael A. Einhorn

Abstract

As regulators continue to open utility markets to entry, new market contestants may specialize in providing service for the utility's largest customers. Consequently, old utility pricing procedures may no longer be sustainable. Taking telecommunications regulation as an example, this article develops optimal pricing strategies for utilities that have large customers who have other attractive service options. I demonstrate that under an optimal nonuniform price schedule, utilities can legitimately price high-level usage below its associated marginal usage cost. Furthermore, customers will make economically efficient choices when deciding whether to forego utility service.

Suggested Citation

  • Michael A. Einhorn, 1987. "Optimality and Sustainability: Regulation and Intermodal Competition in Telecommunications," RAND Journal of Economics, The RAND Corporation, vol. 18(4), pages 550-563, Winter.
  • Handle: RePEc:rje:randje:v:18:y:1987:i:winter:p:550-563
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0741-6261%28198724%2918%3A4%3C550%3AOASRAI%3E2.0.CO%3B2-%23&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Johns Adam, 2012. "Contested Contestability: Competition Policy and the Development of Communications Satellite Broadcasting in Japan," Business and Politics, De Gruyter, vol. 14(2), pages 1-21, August.
    2. Joan Calzada, 2006. "Worksharing and Access Discounts in the Postal Sector with Asymmetric Information," Journal of Regulatory Economics, Springer, vol. 29(1), pages 69-102, January.
    3. Armstrong, Mark & Sappington, David E.M., 2007. "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 27, pages 1557-1700, Elsevier.
    4. John A. Weinberg, 1994. "Selling Federal Reserve payment services: one price fits all?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 1-24.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:18:y:1987:i:winter:p:550-563. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rje.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.