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The Long-Run Efficiency Of Block-Rate Pricing

Author

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  • Ziv, Bar-Shira
  • Finkelshtain, Israel

Abstract

It is widely believed that block-rate pricing separates income redistribution from efficiency consideration. We show that social optimum can not be implementable by block-rate pricing. Particularly, block-rate pricing with marginal cost as the highest block induces over production and utilization of resources, too-small firm size, and welfare losses.

Suggested Citation

  • Ziv, Bar-Shira & Finkelshtain, Israel, 1998. "The Long-Run Efficiency Of Block-Rate Pricing," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20948, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea98:20948
    DOI: 10.22004/ag.econ.20948
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    Cited by:

    1. Griffin, Ronald C. & Mjelde, James W., 2011. "Distributing water's bounty," Ecological Economics, Elsevier, vol. 72(C), pages 116-128.

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